Preamble

[Mr. SPEAKER in the Chair]

DEATH OF A MEMBER.

MR. SPEAKER made the following communication to the House:

I regret to have to inform the House of the death of James Henry Hall, Esquire, Member for the Borough of Stepney (Whitechapel and St. George's Division), and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the honourable Member.

NEW WRIT.

For the County of Berks (Windsor Division), in the room of Sir Annesley Ashworth Somerville, K.B.E., deceased.—[Mr. James Stuart.]

PRIVATE BUSINESS.

PROVISIONAL ORDER BILLS.

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, referred on the First Reading thereof, no Standing Orders are applicable, namely—

Ministry of Health Provisional Order (Caernarvon) Bill.
Ministry of Health Provisional Order (Poole) Bill.
Ministry of Health Provisional Order (Mold Gas and Water) Bill.

Bills to be read a Second time upon the next Sitting Day.

LONDON PASSENGER TRANSPORT BOARD BILL.

Read the Third time, and passed.

PEMBROKESHIRE COUNTY COUNCIL BILL. [Lords.]

Read a Second time, and committed.

PRINCESS ELIZABETH OF YORK HOSPITAL FOR CHILDREN AND QUEEN'S HOSPITAL FOR CHILDREN (AMALGAMATION, ETC.) BILL. [Lords.]

Read a Second time, and committed.

Oral Answers to Questions — GREECE (FOOD SUPPLIES).

Mr. Edmund Harvey: asked the Parliamentary Secretary to the Ministry of Economic Warfare whether any progress has been made in arrangements for the supply of food to the Greek islands; and whether the Turkish Government will continue the valuable assistance it has already given in the supply of food to the starving population?

The Parliamentary Secretary to the Ministry of Economic Warfare (Mr. Dingle Foot): No reply has yet been received to the proposal by His Majesty's Government that the Aegean Islands should be included in the Swedish scheme of food relief. We are, however, endeavouring to arrange for a ship-load of foodstuffs from Turkey to be sent to the Islands, and to be distributed there under neutral supervision. As regards the second part of the Question, the s.s. "Dulumpinar" was expected to sail last week from Istanbul with a cargo of foodstuffs for the Greek mainland. How far it will be possible to continue this form of assistance is a matter for the Turkish Government to decide, in the light of Turkey's own requirements.

Mr. Harvey: May we take it that if the Turkish Government had not taken this generous step thousands of lives would probably have been lost? Will His Majesty's Government continue their efforts to get some solution?

Mr. Foot: We certainly ought to express our appreciation of the practical sympathy shown in this matter by the Turkish Government.

Oral Answers to Questions — BRITISH ARMY.

CADET FORCE.

Mr. Keeling: asked the Secretary of State for War whether he is aware that the Cadet Force has to pay more for rations in camp and for travelling to and from camp than the Air Training Corps; that Cadet officers, unlike Air Training Corps officers, draw no pay or allowances in camp; and that Air Training Corps officers appointed before 31st March last are, unlike Cadet officers, exempt from


conscription; and whether he proposes to arrange equality of treatment for the Cadet Force in these respects?

The Secretary of State for War (Sir James Grigg): In future, Army cadets will be charged the same for rations as the Air Training Corps. The cost of travelling to and from camp for both the Army Cadet Force and the Air Training Corps is refunded. The training arrangements of the Air Training Corps and of the Army Cadet Force are not entirely comparable. The grant of exemption from service under the National Service Acts to holders of a King's Commission in the Air Training Corps was discontinued on 31st March last. No King's Commissions were granted in the Army Cadet Force before that date.

Mr. Keeling: asked the Secretary of State for War whether he is aware that, despite his assurance that the terms given to the Cadet Force are not less favourable than those given to the Air Training Corps, the capitation grant of the Air Training Corps is much larger than that of the Cadet Force, and Air Training Corps officers draw a uniform allowance of £20 while Cadet Force officers merely receive a battle-dress; and whether he will endeavour to get these inequalities rectified?

Sir J. Grigg: The grants are based on the expenses which have in each case to be met. A considerable proportion of the capitation grant of the Air Training Corps is spent on accommodation services, which the Army Cadet Force largely gets free at Territorial Army and Home Guard premises. The Army Cadet Force officer receives no uniform allowance, since his uniform, unlike that of the Air Training Corps officer, is issued to him free.

ANTI-CHOLERA INOCULATION (INDIA).

Mr. Viant: asked the Secretary of State for War whether he is aware that, in spite of doubts of the efficacy of anti-cholera inoculation expressed by eminent Army medical officers, an Army medical officer forcibly inoculated Gunner Blackie, 1639226, in Bombay, on 15th April, 1942, against cholera; that Blackie was then charged with conduct prejudicial to good order and discipline and awarded seven days' field punishment with loss of seven days' pay; and whether he will inform the officers responsible that they

have violated Army rules and regulations and must make reparation to Blackie for the assault on his health and the illegal punishment he received for exercising his rights?

Viscountess Astor: asked the Secretary of State for War whether he is aware that Gunner Blackie, 1639226, refused to be inoculated in India against cholera, after having learned that vaccination and inoculation can only be performed on men going overseas subject to the consent of each individual, as was stated by the Secretary of State for War in this House, in October, 1939; that this man was held down and forcibly inoculated by the medical officer on 15th April, 1942; and whether any reparation will be made for this illegal assault on a member of His Majesty's forces?

Sir J. Grigg: I am making inquiries into this case, and will communicate with my hon. Friends in due course.

OFFENDERS (LEAVE).

Mr. Burke: asked the Secretary of State for War whether he is aware that commanding officers, in addition to awarding the usual form of punishment for offences, put back the offenders' leave for a long period, and that this causes great resentment among the men as well as inflicting hardship on innocent relatives; and whether he will discourage this practice?

Sir J. Grigg: It would not, I think, be right for me to interfere with the discretion of commanding officers in this matter.

Mr. Burke: Is it not possible, if a man has received 14 days' confinement to barracks and that is not considered sufficient, for it to be increased to 21 or 28 days, rather than penalising the dependants of the man, as happens when a man who is expecting to go on leave at the end of June is not allowed to go home until the end of August?

Sir J. Grigg: It is impossible to deal with the whole of the variety of cases that arise. That is why I think it would be wrong to interfere with the discretion of commanding officers. To take a very simple example, it would not be in the least unjust, I think, to defer the privilege leave of a soldier who had been absent without leave.

Mr. Burke: In cases not of that description, would the right hon. Gentleman look very sympathetically into the hardship which is caused by the infliction of two kinds of punishment for one offence?

Sir J. Grigg: I will certainly look into any case of that sort; but, as I said, I would be very loth to interfere with the discretion of commanding officers.

AUXILIARY TERRITORIAL SERVICE (ALIENS).

Mr. Messer: asked the Secretary of State for War whether friendly aliens who are members of the Auxiliary Territorial Service are precluded from obtaining promotion?

Sir J. Grigg: No, Sir.

MILITARY ROADS (MIDDLE AND FAR EAST).

Mr. Price: asked the Secretary of State for War whether, in view of the importance of the construction of military roads for the successful prosecution of the war in the Middle and Far East; any steps have yet been taken to set up an organisation similar to the Todt organisation used by the German Army?

Sir J. Grigg: A military organisation for constructional work in the Middle East has existed for some time, and the fullest use is made of local labour. It is not within my power to conscript or employ civilian labour under conditions similar to those of the Todt organisation, which is a civilian organisation employing mobile civilian labour under quasi-military discipline.

Mr. Price: Are the civilians employed at all; and do they work with those of our men who are under military discipline, in the same organisation?

Sir J. Grigg: I imagine so, because, as I said in my answer, the fullest use is made of local labour. That would not be conscripted labour or military labour.

PAY CORPS.

Sir Henry Morris-Jones: asked the Secretary of State for War how many category A and B men are now in the Royal Army Pay Corps; and whether he is aware that many of the personnel in this corps working in offices, complain of lack of sufficient to do, and their applications

to be transferred to combatant units have been refused?

Sir J. Grigg: It would not be in the public interest to give the figures asked for. I am not aware that the Royal Army Pay Corps is under-worked. Men of higher medical category are being transferred to combatant corps as fast as the supply and, training of substitutes allow.

Sir H. Morris-Jones: Will my right hon. Friend assure the House that low category men will be used in this Corps, as Members of this House are receiving letters from active men of the Royal Army Pay Corps, who prefer to enter combatant units, and will he look into the matter?

Sir J. Grigg: This is a matter which is very well known to me. The difficulty is in getting sufficient substitutes quickly enough, so that my hon. Friend is pushing an open door as regards the policy, but as regards the practice, that depends upon supply.

OVERSEAS SERVICE (LEAVE).

Mr. Oliver: asked the Secretary of State for War what steps are being taken to grant leave to come home to men who have been continuously overseas since the outbreak of war?

Sir J. Grigg: I regret that it is impossible at the present time to grant individual leave from most stations abroad. I can, however, assure my hon. Friend that the desirability of relieving complete units which have been overseas since the outbreak of war is not being overlooked, but he will realise that shipping and operational factors govern the situation.

Mr. Oliver: Are there any prospects of the answer of my right hon. Friend being put into effect in the near future?

Sir J. Grigg: My hon. Friend can judge that as well as I can.

Mr. Oliver: I have not the facts at my disposal.

Sir J. Grigg: I should not have thought that the prospects were very rosy.

MADAGASCAR.

Sir A. Southby: asked the Secretary of State for War whether he can give any further information regarding the position of our forces in Madagascar and the extent to which the island is under the control of the Allies?

Sir J. Grigg: It would not be in the public interest to give any further information at present.

Sir A. Southby: Can my right hon. Friend say when he or the Prime Minister will be able to inform the House and the country of the course of events in Madagascar?

Sir J. Grigg: I am sorry, Sir, I cannot undertake to be a prophet.

HORSES (SALE).

Mr. Evelyn Walkden: asked the Secretary of State for War what contracts have been granted to a Mr. Christopher, of Lincoln, or a firm known as De Mulders, Doncaster, or Hermann Schapiro, Limited, Doncaster, to purchase Army horses in Doncaster, or elsewhere, which are aged or unfit for further Army service, what is the price paid for such animals; how were the contracts negotiated; and, in view of the fact that ex-Army horses are now yielding generous profits to horse slaughterers and butchers, he will offer such horses for sale by advertised or open tender, or attempt to secure prices equitably related to the wholesale prices for horseflesh now fixed by the Minister of Food?

Sir J. Grigg: The contracts with De Mulders and H. Schapiro were arranged by the General Officer Commanding, Northern Command, for the sale of carcases of horses which have died or been destroyed in military units in that Command. The conditions of the contract is that these carcases may not be resold for human consumption. It would be contrary to established practice to disclose contract prices. The contract with Mr. Christopher was placed by the Ministry of Supply.

Mr. Walkden: Can my right hon. Friend assure us that the horses in question do not actually reach the horse-flesh butchers in the human consumption category; and is it not a well known fact in this particular trade that the new price lists issued by the Minister of Food mean that they are getting horses at £2 which are actually worth £10 in wholesale value immediately they come on to the market?

Sir J. Grigg: I think that, if my recollection is right, the contract in which the question of the sale for human consumption arises is placed by the Ministry of Supply.

Mr. Walkden: I believe you sell horses at £2 which are worth £10, and that is the trouble.

Oral Answers to Questions — FRENCH TANKS (USE AGAINST RUSSIA).

Mr. Purbrick: asked the Secretary of State for War whether any of the tanks being used by the enemy against Russia were made in France; and, if not, on what fronts are those tanks being used?

Sir J. Grigg: There are indications that tanks made in France are being used by the enemy against the Russians. They have not been used on other fronts, but are being employed for training purposes.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS.

WAR OFFICE (OFFICIAL'S DISMISSAL).

Commander Sir Archibald Southby: asked the Secretary of State for War whether, in reviewing the case of Mr. Charles Stevens, whose services at the War Office were dispensed with in 1935, he has satisfied himself that, as regards the information given to Mr. Stevens of the details of the alleged circumstances and reasons for his dismissal, the regulations have been strictly complied with?

Sir J. Grigg: No rigid regulations exist in regard to the procedure to be followed in such cases. In common with my predecessors who reviewed this case, I am satisfied that no injustice has been done.

Sir A. Southby: Can my right hon. Friend assure the House that this gentleman has received all the information which it is possible to give him with regard to his case?

Sir J. Grigg: I am satisfied, as were those of my predecessors who reviewed the case, that Mr. Stevens was fully aware of the reasons for his dismissal, that he had every opportunity to make such representations as he desired, and that those representations, both oral and written, were fully considered by the Permanent Under-Secretary of the day.

UNESTABLISHED CIVIL SERVANTS (GRATUITIES).

Mr. Viant: asked the Financial Secretary to the Treasury whether it is the practice of the various Departments to encourage the temporary civil servants,


when about to retire at the age of 65 years, to continue their service during the period of the war; and, if they consent, is it the policy of his Department to reduce their gratuity for each year served beyond the age of 65 years?

The Financial Secretary to the Treasury (Captain Crookshank): I assume that in the phrase "temporary Civil Servant," the hon. Member has in mind unestablished civil servants. In that case the answer to the first part of the Question is in the affirmative, and to the second that an unestablished civil servant retained after 65 years of age will continue to earn additional gratuity for each completed year after that age.

Mr. Viant: Does not the Financial Secretary consider that this is a discouragement to further service rather than an inducement?

Captain Crookshank: I should not have thought there was any discouragement. A man continues to earn additional gratuity.

OFFICE SITE, COLWYN BAY.

Sir H. Morris-Jones: asked the Minister of Agriculture why his Department agreed to sanction the use of good agricultural land at Colwyn Bay for the purpose of constructing offices for a Government Department when derelict building land, properly sewered, is available in the borough, apart from vacant residences which could be utilised?

The Joint Parliamentary Secretary to the Ministry of Agriculture (Mr. T. Williams): My right hon. Friend agreed to the use of this site only after all efforts to obtain a suitable alternative site on land of lower agricultural value had failed. The derelict land was too small in area for the particular Department's requirements.

Sir H. Morris-Jones: Is it not a fact that the Land Commissioner and the chief executive officer of the war agricultural committee recommended another site of no agricultural value? How is it that the Minister sanctioned the use of good land when existing buildings are available which could be made suitable?

Mr. Williams: The hon. Gentleman has already learned from my right hon. Friend that alternative sites had been examined.

Mr. Rhys Davies: May we take it that the building of offices at Colwyn Bay means the beginning of granting Home Rule to the Principality?

Oral Answers to Questions — NAVY, ARMY, AND AIR FORCE INSTITUTES.

Mr. Bellenger: asked the Secretary of State for War whether he can now indicate what arrangements are to be made to implement the recommendation of the Select Commitee on National Expenditure regarding the attachment of representatives from the ranks to the headquarters of the Navy, Army and Air Force Institutes?

Sir J. Grigg: The whole question is still under discussion, and I regret, therefore, that I am not yet in a position to give my hon. Friend any further information.

Mr. Bellenger: In view of the long time which has elapsed since the Select Committee made its report on this matter, can my right hon. Friend do anything to expedite what most of us think should be quite a simple decision?

Sir J. Grigg: Without accepting the hon. Member's definition of simplicity, I will certainly do what I can to hurry it up.

Oral Answers to Questions — BRITISH PRISONERS OF WAR.

Major-General Sir Alfred Knox: asked the Secretary of State for War whether inquiries can be made through the Protecting Power or the International Red Cross regarding overcrowding and sanitary conditions in Oflag VI B?

Sir J. Grigg: The Protecting Power has been informed that, in order to relieve overcrowding, 400 officers will be transferred to a new camp as soon as it is ready. The Protecting Power has made strong representations to the German authorities about the sanitary conditions at Oflag VI B, and I am hopeful that there may be an improvement.

Sir A. Knox: asked the Secretary of State for War whether there has been any information as to the employment of British prisoners of war in the manufacture of munitions in Germany?

Sir J. Grigg: I have as yet received no conclusive evidence of such employment.


An alleged case of this nature is, however, being investigated at this moment by the Protecting Power.

Oral Answers to Questions — SCOTLAND.

TENANT FARMERS (SECURITY OF TENURE).

Mrs. Hardie: asked the Secretary of State for Scotland whether he is aware that three tenant farmers on Saltoun Estate, East Lothian, have been evicted on the grounds that the landowner intends to work the farms himself; that these evictions are causing a feeling of insecurity amongst tenant farmers in South Scotland; and whether he will take steps to have enacted that tenant farmers shall have security of tenure for the duration of the war and for some time afterwards?

The Secretary of State for Scotland (Mr. T. Johnston): I understand there are some few cases in which proprietors have given tenants notices to quit at Martinmas, 1942, in order to take the farms into their own hands, but I have no detailed information regarding the three instances mentioned in the first part of the Question. The National Farmers' Union and Chamber of Agriculture of Scotland have asked for a meeting with the Scottish Land and Property Federation and my Department to discuss the questions relative to the security of tenure of tenant farmers, and this meeting will be held shortly.

Mrs. Hardie: Will the right hon. Gentleman see that those farmers who have worked their farms through the lean and hungry years are not turned out now when guaranteed prices and subsidies have been introduced?

Mr. McGovern: Will the Secretary of State do everything he can to take over land of this kind in order to protect the tenants?

Mr. Johnston: That hardly arises on this Question, but a very considerable amount of deer forests and other land has been taken over.

Mr. McGovern: Is it not a fact that most of it that has been taken over is of no use?

Mrs. Hardie: asked the Secretary of State for Scotland whether before he allowed the eviction of the tenant of Saint John's Farm, Berwickshire, he consulted the Berwick County Agricultural Execu-

tive Committee and with what result; and, as the buyer of this farm owns another farm, why was the protection against eviction provided in Defence Order 62 (41) not granted to this farmer?

Mr. Johnston: I consulted the agricultural executive committee for Berwick-shire and fully accepted the favourable report which they gave me of the existing tenant's management. But there was no evidence of land speculation in the purchase, and food production interests were not adversely affected by the proposed change of occupier. The purchaser of the farm is at present the tenant of a small-holding, not the owner of a farm. He has proved his farming capacity and he is giving up the tenancy of the smallholding when he takes over the farm. In my opinion, therefore, there were inadequate grounds for refusing my consent under the Defence Regulation.

Mrs. Hardie: Does the Minister think that it is fair to the farmer who is a good farmer and has worked his farm should be turned out because someone else thinks that it is a good proposition; and why did he give his consent in a case of that kind?

Mr. Johnston: The only ground upon which my consent can be refused under the Defence Regulations is if there is evidence of speculation. There was none in this case.

Mr. Neil Maclean: Is it not the case that the outgoing farmer was farming the land usefully and well, and why is it therefore that another farmer can come along and supplant a farmer who has already proved his worth to the community in war-time? If there is no power under the Defence Regulation, cannot something be done to protect farmers who are making good use of the land that they are farming?

Mr. Johnston: As I have already said, the Defence Regulation gives the Minister power to refuse his consent only if there is evidence of speculation in the rents and price of land, and there is no such evidence whatever here.

Mr. Stokes: Would the right hon. Gentleman regard the putting-up of the rent as speculation or not?

Mr. Stephen: What was the reason, if there was no speculation in this case?

Mr. Johnston: There was a change of ownership; as a matter of fact, this was the winding-up of a trust estate.

Mr. Maclean: Is there not power to prevent a farmer from being evicted in a case of hardship, and could the right hon. Gentleman not have refused it on these grounds?

FARM RENT REVISION.

Mrs. Hardie: asked the Secretary of State for Scotland whether regulations provide that when a landlord demands increased rent from a tenant farmer and the tenant asks for arbitration the landlord is bound to accept and, where arbitration is accepted, that instructions are given to the arbiter as to how he should base his award?

Mr. Johnston: The answer to the first part of the Question is in the negative. Under the Agricultural Holdings (Scotland) Act, 1923, either the landlord or the tenant is entitled to ask the other to agree to arbitration in regard to revision of rent after an occupancy for five years at a previously agreed rent. If the landlord refuses or fails within a reasonable time to agree and the tenant gives notice to quit because of this, he is entitled to compensation for disturbance—normally equivalent to one year's rent. On the other hand should the tenant refuse to agree to arbitration and the landlord because of the refusal serves notice to quit, the tenant loses his right to compensation for disturbance. I have no power to instruct an arbiter as to the exercise of his independent judgment on any case submitted to him.

Mrs. Hardie: Is the right hon. Gentleman aware that it is no remedy to the farmer to give notice to the landlord as he does not want to leave the farm; that there is no protection for the farmer whatever if the landlord is not prepared to agree to arbitration; and that many arbitrators base their award on the fact that other farmers round about are paying an increased base rent because they are afraid of quarrelling with their landlord; and cannot something be done?

Mr. Johnston: As far as my evidence goes, there have been only three cases reported, so that there cannot be many cases at all.

Mr. Mathers: In view of the profit that the landlord is making out of this transaction, will the right hon. Gentleman direct the attention of the Chancellor of the Exchequer to this fruitful source of income?

SECONDARY EDUCATION, ABERDEEN.

Mr. Garro Jones: asked the Secretary of State for Scotland whether he is aware that Aberdeen is the only city in Scotland where secondary education is carried on on a half-time basis; that there is a general feeling in that city that the old and infirm temporary occupants of the central school could be more suitably housed outside an area which is from time to time visited by enemy bombers; and whether he will consider by what means the present unsatisfactory arrangements, which are having a serious effect upon about 1,500 secondary pupils, can be improved upon?

Mr. Johnston: I am aware that Aberdeen is the only city in Scotland in which a large proportion of the secondary pupils are receiving less than full-time education. Efforts have been made, unfortunately without success, to obtain suitable alternative accommodation within or without the city for the patients at present accommodated in the Central Secondary School. I shall welcome any assistance in securing such suitable alternative accommodation. But as the hon. Member will be aware, schools have been requisitioned for war purposes and so far it has been found impossible to secure their release.

Mr Garro Jones: Can my right hon. Friend say whose duty it is to look for alternative accommodation and to decide whether such accommodation is suitable or not, because my information is that there is much suitable accommodation which has been unjustifiably rejected?

Mr. Johnston: If my hon. Friend will give me any evidence of that kind, I shall be greatly obliged to him.

Oral Answers to Questions — PETROL RATIONING.

Sir John Mellor: asked the Secretary for Petroleum whether the use of petrol saved from basic rations will be permitted after 30th June?

The Secretary for Petroleum (Mr. Geoffrey Lloyd): No, Sir.

Sir J. Mellor: Why not?

Mr. Lloyd: Because it was given for use during the period which ends on 30th June.

Sir J. Mellor: Could not my hon. Friend give these people until 15th July to use up any petrol they have managed to save on their basic ration. May I have a reply to my question?

Mr. Molson: Is my hon. Friend aware that this is likely to result in a great waste of petrol?

Mr. Lloyd: I will consider that point.

Oral Answers to Questions — TRADE AND COMMERCE.

RETAIL TRADE COMMITTEE (REPORT).

Mr. Graham White: asked the President of the Board of Trade whether the Committee on Retail Trade has now completed its task; and when he hopes to be able to present a report to the House?

The President of the Board of Trade (Mr. Dalton): I wrote yesterday to the chairman of the Retail Trade Committee asking him to expedite the Committee's report.

BLACK MARKET OPERATIONS (MR. YANDELL'S APPOINTMENT).

Mr. Graham White: asked the President of the Board of Trade (1) what function is to be performed by the Department under Mr. George Yandell, which it is not now the duty of the police force to discharge;
(2) whether the appointment of Mr. George Yandell, as Chief Enforcement Officer of the Board of Trade, is permanent or temporary; how many assistants will be at his disposal; and how many of them will be permanent?

Mr. Dalton: Mr. Yandell has been appointed to investigate cases arising from infringements of the Limitation of Supplies, Rationing and other Orders administered by the Board of Trade which appear likely to lead to criminal proceedings and to require co-operation between the police and the Board's staff. The Board of Trade have hitherto found themselves handicapped by the absence of expert police guidance within the Department in the earliest stages of investigations, and it is hoped that the appointment of an ex-police officer of Mr. Yandell's ability and experience will remedy this. He will not deal with cases which should be handled by the police alone. Mr. Yandell's appointment is a temporary one. He has no special assistants, but will co-

operate with the present staff engaged in enforcement of the Orders and in frustrating black market operations.

Mr. White: Will my right hon. Friend keep a careful eye on the publicity from this Department, especially on any interviews which may be given, lest these officers, in their enthusiasm for their duty, should convey the erroneous impression that in this country there is a large number of crooks and traitors?

Mr. Dalton: I will certainly watch that, but I think the House desires that I should stiffen up to the greatest possible extent the operations designed to check black market business. It was with that in mind that this appointment was made.

Mr. Evelyn Walkden: Is not widespread publicity necessary in order to encourage these men in their work and to achieve success?

Mr. Dalton: Yes, Sir, if it is of the right kind.

Colonel Sandeman Allen: Do I understand that the police have so far failed and that it has been necessary to draw on Scotland Yard?

Mr. Dalton: We can always improve even a moderately good arrangement, and I think the House will expect me to take whatever steps are open to me to stamp out this black market business.

CONCENTRATION OF INDUSTRY.

Mr. Wootton-Davies: asked the President of the Board of Trade whether the Explanatory Memorandum, issued by his Department in March, 1941, on the Concentration of Industry is still the basis of concentration; and how many Departments or Ministries are now concerned with the initiation of concentration?

Mr. Dalton: Yes, Sir. This Memorandum is still the basis of our policy. The Ministry of Food and the Ministry of Works and Buildings, in addition to the Board of Trade, are concentrating industries which fall within their province.

Mr. Wootton-Davies: Does not the right hon. Gentleman think it advisable to have more concentration under one head in order to get one definite policy? Is it not possible that with two or three Departments dealing with this there would be two or three different readings of the Memorandum?

Mr. Dalton: I do not think so; we keep in close contact, and, of course, any matter relating to food more properly falls within the purview of the Ministry of Food than the Board of Trade.

Sir Herbert Williams: Has the retreat from concentration been conducted on the terms of the same Memorandum?

Mr. Dalton: No, Sir. There has not been retreat; there has been reconsideration of the position in the light of the economic position. We must, of course, always be prepared to take account of any changes in the original situation which led to a particular scheme being advisable before.

STEEL TOOLS (EXPORT TO SOUTH AMERICA).

Sir H. Williams: asked the President of the Board of Trade whether he will authorise the granting of licences to enable the export to South American countries of picks, shovels, hoes, spuds, coffee diggers, and other agricultural and mining tools of (he kind that have been regularly shipped from this country to South American countries?

Mr. Dalton: Exports of these steel tools are subject to the Lend-Lease undertakings of His Majesty's Government. The supply of such goods to South American countries has recently been fully discussed with the United States authorities, and I am satisfied that the United States industry should be able to supply the essential South American requirements. If, however, manufacturers in this country have steel already rolled for making tools and implements for South American countries and only suitable for this purpose, I shall be glad to discuss such cases with the United States authorities.

Sir H. Williams: Is the Minister aware that many specialised tools are made only in this country because of the enormous variety of tools supplied to different agricultural workers throughout the world?

Mr. Dalton: I know that is the case with some of them, and, as I have already indicated, if there are any firms which have steel already made up into these tools, we shall be glad to take them up. But we must be very careful not to give any opportunity to our enemies to maintain that His Majesty's Government are not faithfully carrying out their international obligations.

Mr. R. J. Taylor: Will my right hon. Friend see that the requirements of the mining industry in this country are the first consideration?

Mr. Dalton: Certainly they are a most important consideration.

Mr. Stokes: Are we to understand that under Lease-Lend we have virtually handed over our export in iron and steel trade in South America to the United States?

Mr. Dalton: No, Sir. I think that is an undue simplification.

Mr. Levy: Is it not a fact that no decision can be taken in this country about anything without consultation with the United States with regard to export trade, which is so essential?

Mr. Dalton: The hon. Gentleman is perfectly correct in so far as materials are obtained from the United States for the war effort under the Lease-Lend arrangements.

GOVERNMENT'S COAL SCHEME (NEWSPAPER FORECASTS).

Sir H. Williams: asked the President of the Board of Trade whether his attention has been drawn to the fact that the outline of the Government coal proposals appeared in the morning newspapers on 3rd June, though the White Paper was not published until 5.15 p.m. that day; and if inquiries are being made as to the source of the disclosure?

Mr. Dalton: Yes, Sir. I have looked into this matter and have reached the conclusion that the varying forecasts published by the newspapers were based on a general knowledge of the proposals which had been under discussion and intelligent anticipation of the Government's decisions, rather than on any premature disclosure of the White Paper. None of the articles published on the morning of 3rd June purported to give a comprehensive account of the Government scheme; and I would remind my hon. Friend that some of the matters dealt with in the White Paper had previously been debated in Parliament, that certain of the proposals submitted to the Government had already been published and that Ministers had necessarily held consultations with representatives of the industry.

Sir H. Williams: As the proposals were not in any way known to representatives of the various industries concerned, and as the Press showed almost complete unanimity in their very accurate picture, is it not time that steps were taken to stop this leakage from the Board of Trade?

Mr. Dalton: I have looked into this matter very carefully and have studied the various forecasts in the Press. They differed widely among themselves, and nearly all were wrong in one important particular. If the hon. Gentleman would like to go through the Press cuttings with me, I think I should be able to convince him.

Sir H. Williams: How is it they all tipped the new Minister?

Mr. Dalton: That was not in the White Paper.

Mr. Mathers: Is there any indication here of information leaking from the 20-years-behind-the-times Committee?

COAL MINERS (ABSENTEEISM).

Wing-Commander James: asked the President of the Board of Trade whether his attention has been drawn to the fact that absenteeism among the face-workers in the Yorkshire Amalgamated Collieries has risen from 14.72 per cent. in the first quarter of 1939 to 21.79 per cent. in the first quarter of 1942, the bulk of the consequent loss of output deriving from 20 per cent. of the workers, which includes a high proportion of the younger men; why the Government, having assumed disciplinary control, has taken no effective steps to face up to this issue; and what action he now proposes to deal with it?

Mr. Adamson (Lord of the Treasury): I have been asked to reply. The statistics of attendance for these collieries for the periods referred to have been examined, and I should inform the hon. and gallant Member that the absenteeism percentages quoted present a very misleading picture. Although the number of shifts lost has increased since 1939, the number of shifts worked per man has also increased by a third of a shift per week. The apparent increase in absenteeism is thus due to an increase in the number of shifts offered.

As to the latter part of the Question, I would refer the hon. and gallant Member to the White Paper issued on 3rd June.

Mr. A. Hopkinson: May we have the answer repeated? Not a word was audible.

Mr. Collindridge: Is my hon. Friend aware that the figures embodied in the Question do not square with the figures published by the production committee in the area concerned?

HOUSE OF COMMONS (LENGTH OF SPEECHES).

Sir Leonard Lyle: asked the Prime Minister whether, in view of the present short sittings and the need for participation in debate of the maximum number of Members to ensure the vitality of Parliamentary control over an all-party Government, he will propose that on suitable occasions no Member should speak for more than 15 minutes except by leave of the House?

The Lord Privy Seal (Sir Stafford Cripps): As my right hon. Friend the Prime Minister said in reply to a Question by my hon. and gallant Friend the Member for East Renfrew (Major Lloyd) on 18th February, 1941, the question of limiting the length of speeches has been considered on many occasions but no satisfactory remedy has so far been found. The solution rests with hon. Members themselves, and any voluntary arrangement which would allow a greater number to give expression to their views on important debates within the time allotted would undoubtedly be to the general advantage.

Sir L. Lyle: May I ask my right hon. and learned Friend whether, quite apart from the utterances and speeches of the Prime Minister, of which we can never have too much, he does not agree that speeches, not only by hon. Members, but by members of the Government would be vastly improved if they were cut by 50 per cent?

Sir S. Cripps: That is a matter of opinion, I think.

Mr. Garro Jones: Is it not rather noteworthy that those who fail to find a procedure for shortening speeches are those who are most addicted to giving the House long speeches, and would it not be more


likely that a solution would be found if the matter were considered by Back-Bench Members and others who make short speeches?

Mr. Isaacs: Have the Government thought of issuing coupons?

ARMED FORCES.

LETTERS TO MEMBERS OF PARLIAMENT.

Sir A. Southby: asked the Prime Minister whether he will take such steps as are necessary to make it clear that, besides the proper Service procedure open to him, every member of His Majesty's Forces possesses the inalienable right to communicate with his own Member of Parliament on any subject upon which he feels himself to be in need of the help and advice which it is the duty of his Parliamentary representative to give him, and that the serving man cannot be penalised for so doing?

The Deputy Prime Minister (Mr. Attlee): I would refer my hon. and gallant Friend to the answer which my right hon. Friend the Prime Minister gave on 20th May, 1941, in reply to a Question by my hon. Friend the Member for London University (Sir E. Graham-Little) of which I am sending him a copy.

Sir A. Southby: Is my right hon. Friend aware that it is not claimed that the man should have the right to communicate with any Member of Parliament, but only with his own Member of Parliament, and is he further aware that the present Foreign Secretary, when he was Secretary of State for War, replying to a Question in 1940, said that it was not the desire to prevent the access of men to their Members of Parliament, but only to square that with the Regulations?

Mr. Attlee: I think that if my hon. and gallant Friend will refer to the statement that was made by the present Foreign Secretary, he will find a very full answer.

Mr. A. Edwards: Will my right hon. Friend put an end to the opening of letters to Members of the House from members of the Forces?

COST.

Miss Cazalet: asked the Prime Minister what is the approximate weekly all-in cost to the State of each man and

woman serving in the ranks of His Majesty's Forces?

Mr. Attlee: It would be impracticable, owing to the widely different conditions in the various branches of the Services and the difficulty in determining the many complicated factors which would have to be taken into account, to provide any reliable average figures of this character.

EX-SERVICE MEN AND MERCHANT SEAMEN (BADGE).

Mr. Bellenger: asked the Prime Minister whether he is now able to indicate whether a badge of suitable design can be issued to all ex-Service men and merchant seamen who are not otherwise eligible for a badge under present Regulations?

Mr. Attlee: On a recent occasion, the House was informed of the reasons for which the Government considered it undesirable to extend the classification of those to whom the King's badge for invalided officers and men can be issued. At the same time, a promise was made on behalf of the Government that the question of the institution of a new badge for invalided officers and men ineligible for the present King's badge should be examined. It is, of course, inevitable that, given the basis of award for the King's badge, there must be difficult border line cases which may seem to be hard cases for those affected. The Government have, therefore, considered with sympathy the proposal for a hew badge.
They have, however, reluctantly decided not to adopt this proposal. A considerable number of those eager to join the combatant services have to be rejected on medical grounds. It would be invidious to make any distinction between these men and those whose disabilities escape detection until after they have been admitted. Every man and woman in this country should now be doing the work by which, in the opinion of the Government, he can render the best service to his country. There is, therefore, no just basis for distinction between those who are discharged from the combatant Services owing to ill health which is not attributable to their service and those who are obliged to give up other forms of service for similar reasons.
In conclusion, I would remind the House that, under the conditions of total war, no man's patriotism can be called in question because he is wearing civilian clothes. In this war, therefore, no man requires a badge or any other form of decoration to prove that he has done his duty to his country or has been willing to do it.

Mr. Bellenger: Can my right hon. Friend indicate how the Government have looked at this matter with sympathy, and does he understand that his answer will cause considerable disappointment among large numbers of men who have been discharged from the Forces after doing their duty, and some of whom are now receiving white feathers because they wear civilian clothes?

Mr. Attlee: I would remind my hon. Friend that because one examines a matter with sympathy, it does not necessarily mean that one comes to the same conclusion as he does. The matter has been looked at with sympathy, and I think the reply shows conclusively that there would be great difficulties in making distinctions which would not cause hardship in one direction or another.

CIVILIAN WAR CASUALTIES.

Mr. Molson: asked the Prime Minister whether he is now able to give the figures of civilian casualties suffered in the British Empire from the outbreak of war until 2nd September, 1941?

Mr. Attlee: Yes, Sir. The number of civilian casualties in the British Empire from 3rd September, 1939, to 2nd September, 1941, was: Killed 43,675; injured and detained in hospital, 50,346. These figures do not include casualties at sea among merchant seamen or civilians.

MALAYA AND SINGAPORE.

Mr. Stokes: asked the Prime Minister whether he will make available for Members of this House the report sent home from Singapore last autumn from the Chancellor of the Duchy of Lancaster on the conditions then existing in Malaya?

Mr. Attlee: No, Sir.

Mr. Stokes: If my right hon. Friend will not make the report available, will he consider giving the Chancellor of the

Duchy of Lancaster an opportunity on the next suitable occasion to make a statement in the House?

Mr. Bellenger: Is the consistent refusal of the Government to give the House any information about what has happened overseas in Malaya and Singapore due to their desire to hide grievous mistakes on the part of high officials?

Mr. Attlee: No, Sir.

Sir A. Southby: If the Government are not prepared to publish the report, will they tell the House and the country the reason why they will not do so?

Mr. Attlee: A reply has already been made on that subject by the Prime Minister.

Mr. Stokes: asked the Chancellor of the Exchequer what arrangements he proposes to make with regard to the wives and dependants of those civil members of the community in Malaya and Singapore who have been captured, or who are missing; and whether they will be treated in the same manner as wives and dependants of men in the Armed Forces?

The Chancellor of the Exchequer (Sir Kingsley Wood): As I indicated in my answer to the hon. and gallant Member for Ayr Burghs (Sir T. Moore), dependants of civilians captured by the Japanese in the Far East will be treated on the same general lines as have been accorded to dependants of British subjects detained in other territories overrun by the enemy or British subjects who have lost their livelihood in this country by enemy action. Analogous arrangements will cover those dependants who are in the Dominions. I do not think that the scheme for military personnel could suitably be applied to civilians, but I am considering how far the arrangements I have mentioned can be supplemented in special cases of individual need.

Mr. Stokes: May I ask the Chancellor of the Exchequer whether the machinery is now in motion? Is he aware that some of these people are in a grievous state, and are they able to get help?

Sir K. Wood: Perhaps my hon. Friend will send me any cases he has in mind. I am giving consideration to these matters.

Sir L. Lyle: Does that answer apply to Hong Kong?

BUILDING RESEARCH.

Mr. Bossom: asked the Lord President of the Council what are the annual expenses of the Building Research Station; who provides these funds; and are the materials and processes that it has approved available for use by anyone without the further approval of either Parliament or the Ministry of Health?

The Lord President of the Council (Sir John Anderson): The estimated gross expenditure during the current financial year for the Building Research organisation of the Department of Scientific and Industrial Research is £80,183. The funds are provided from the Vote of the Department (Civil Estimate, Class 6, Vote 15). The results of research work carried out at the Building Research Station are generally made freely available by publication through the Stationery Office or in appropriate journals. The application by builders of such results in any locality is, of course, subject to compliance with the Building By-laws in force there but does not otherwise require further approval.

Mr. Bossom: Seeing that this work is done at the public expense, is it not desirable that the public should get the benefit of it right away without having to apply to other agencies, such as the councils to which the right hon. Gentleman has referred?

Sir J. Anderson: As my hon. Friend will appreciate, my concern is primarily with research as such, but certainly, I would not wish to see the results of useful research sterilised by the operation of out of date by-laws, and if that is the point which he has in mind, and if he can give me some instances, I will see whether anything can be done.

Mr. Bossom: Could it not be made a general regulation for the entire country?

Sir J. Anderson: That is rather a large question.

Mr. Levy: Is not the object of these researches the benefit of the public as a whole, and is not this secretiveness against the purpose for which the Research Station was created?

Sir J. Anderson: I have made quite clear in my answer that there is no secretiveness. The policy is to publish these results.

NATIONAL FINANCE.

REGISTERED COMPANIES, MALAYA (TAXATION).

Mr. Stokes: asked the Chancellor of the Exchequer whether any refund of Excess Profits Tax or Income Tax on profits earned by tin and rubber companies operating in Malaya before the invasion of Malaya by the Japanese has been promised to those companies; and, if so, to what extent?

Sir K. Wood: I would refer my hon. Friend to an answer given on 26th March, 1942, to Questions by my hon. and gallant Friend the Member for South Cardiff (Colonel Arthur Evans) and my hon. Friend the Member for Stourbridge (Mr. R. Morgan), and the answer to my hon. and gallant Friend the Member for Chippenham (Major Cazalet) on 28th April, 1942.

DE BERNALES GROUP, WEST AUSTRALIA (TAXATION).

Mr. Bellenger: asked the Chancellor of the Exchequer whether Mr. Claude Albo de Bernales and/or the private companies of which he and his family are the shareholders have been taxed on the profits which they made on the promotion and share dealings in the eight West Australian goldmining companies known as the de Bernales group, as set forth in the eight Reports of Sir William McLintock, the inspector appointed under the Companies Act by the President of the Board of Trade; and what unpaid taxation assessments are outstanding against Mr. de Bernales and/or his family companies?

Sir K. Wood: I cannot furnish any information in reply to this Question, as it would be contrary to the statutory obligations of secrecy to disclose any information regarding the tax liability of individual taxpayers.

Mr. Bellenger: I well understand the Chancellor's reluctance to do that, but, if there are any unpaid assessments still outstanding, will he bear in mind the substantial profits which have been made by this gentleman and his associate companies, as revealed in the Sir William McLintock's reports?

TAX RESERVE CERTIFICATES.

Mr. Summers: asked the Chancellor of the Exchequer whether tax certificates


taken out by the parent company of a group are eligible for the discharge of tax liabilities of subsidiary companies?

Sir K. Wood: Yes, Sir.

REQUISITIONED PREMISES (COMPENSATION).

Sir Granville Gibson: asked the Chancellor of the Exchequer whether he is aware that much dissatisfaction exists among firms whose premises have been requisitioned that under a ruling made by his Department no compensation will be payable towards the cost of dismantling machinery and re-erecting it in the requisitioned premises at the termination of their occupation by a Government Department; and will be reconsider the ruling made, in view of the additional expense to which such firms will be put in returning to their own premises?

Sir K. Wood: The compensation payable in respect of the requisitioning of premises is governed by Section 2 of the Compensation (Defence) Act. If premises are requisitioned and the owner is directed to remove any machinery therein and decides to store it, the cost of dismantling, transporting and storing it elsewhere, together with the cost of subsequently re-erecting it in the premises is paid. If, however, the owner decides to re-erect it elsewhere, the cost of dismantling, transporting and re-erecting in the new premises is paid, but in that event the cost of a second dismantling and re-erection cannot be treated, under Section 2 (1, d) of the Act as an expense incurred for the purpose of compliance with a direction by the Government.

Sir G. Gibson: Do I understand that, if a man wishes to reinstate machinery at the end of the war in premises from which he has been dispossessed, the expenses will be paid?

Sir K. Wood: Yes, Sir, under the circumstances laid down in my answer.

DISABLED EX-SERVICEMEN (TAXATION).

Major Peto: asked the Chancellor of the Exchequer whether, in view of the fact that earned income is taxed at a lower rate than unearned income, he will investigate the possibility of reducing the rate of tax at present charged on the pensions of men invalided from the Services

whose physical condition makes it impossible for them to engage in occupations which will bring them earned income of any kind?

Sir K. Wood: Wounds pensions and disability pensions granted on account of medical unfitness attributed to naval, military or Air Force service are not liable to tax. Other pensions which are granted in respect of past service are treated as earned income, and the appropriate deduction is allowed. I am afraid I cannot see my way to propose any further special relief.

ENEMY ACTION (CIVILIAN INSURANCE).

Major Sir Jocelyn Lucas: asked the Chancellor of the Exchequer whether he is aware of the difficulties encountered by men with small resources in obtaining special life policies for air-raid fatalities; and, in view of the recrudescence of raids on this country, will he take immediate steps to facilitate the breadwinner being able to ensure a lump sum being available for his family in case of death?

Sir K. Wood: I cannot add to the answer which I gave to my hon. and gallant Friend on 19th May last.

Mrs. Tate: Is the Chancellor aware of the inconvenience caused to women because their compensation is lower than that paid to men?

Sir K. Wood: No, Sir.

Viscountess Astor: May I ask my right hon. Friend, who has sat on the Front Bench for at least 20 years, whether this is the first time he has heard of this? Will he give us an answer which is really worthy of the Government?

Sir J. Lucas: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

POST-WAR CREDITS (MARRIED WOMEN).

Dr. Edith Summerskill: asked the Chancellor of the Exchequer whether the post-war credits which accrue to a married woman who is assessed jointly with her husband for the purpose of Income Tax will be paid to the husband or wife?

Sir K. Wood: I would refer by hon. Friend to Section 7 (2) of the Finance Act, 1941, which provides that where a wife has income of her own the post-war


credit may be divided between husband and wife if either of them applies for such a division.

WAGE EARNERS (INCOME TAX DEDUCTIONS.

Mr. Oliver: asked the Chancellor of the Exchequer what procedure should be adopted by persons who have Income Tax deducted from their wages when such deductions are improper; and whether he is aware that such persons experience great difficulty in obtaining repayment, in some instances necessitating the intervention of his Department before repayment is possible?

Sir K. Wood: I presume that my hon. Friend is referring to a particular case of an unusual type which he has already brought to my notice in which tax had been wrongly deducted. As he is aware, repayment has now been made. I regret there was some delay in making the repayment and I hope to send my hon. Friend a full explanation in the near future. The normal procedure is, of course, for the taxpayer to appeal at once to his local inspector.

Mr. Oliver: Is the Chancellor aware that more than one case has come to my notice? I understand that when inquiries are made to the Inspector of Taxes, his difficulty is to find the medium to obtain repayment. He has not made an assessment, and, as the employer's banker pays the tax in bulk to the Revenue Department, there seems to be no authority to authorise repayment.

Sir K. Wood: Perhaps my hon. Friend will let me have the case; I will then be able to take up the matter.

Oral Answers to Questions — WOOD FUEL.

Mr. Montague: asked the President of the Board of Trade whether he will take into consideration the advisability of encouraging the use of wood fuel for domestic consumption to relieve pressure on demand for coal during the coming autumn and winter; and whether he will examine the practicability of collecting and storing wood by local authorities for purposes of such supply?

Mr. Adamson: I have been asked to reply. Yes, Sir. This matter is being considered in consultation with the Ministry of Supply. With regard to the second

part of the Question, local authorities were approached some time ago on the subject of collecting and storing surplus wood for us as fuel in time of emergency, and a number of schemes are already in operation.

Mrs. Tate: Can the House share this secret? It was impossible to hear the reply.

Oral Answers to Questions — FUEL RATIONING.

Sir G. Gibson: asked the President of the Board of Trade whether a coupon officer and assistant coupon officer have been appointed to work the coupon scheme for fuel rationing, and if offices have already been taken in Lambeth for working this scheme; and the date on which these appointments were made and the offices taken?

Mr. Dalton: As is indicated in the White Paper on coal, the Government consider it essential to make preparations for the introduction of fuel rationing at short notice, if that should prove necessary. The small headquarters staff engaged in this work since April is, therefore, proceeding with it, and will shortly move to offices previously earmarked by the Ministry of Works and Buildings.

Sir G. Gibson: Is it not somewhat irregular that expenditure should be incurred in taking over premises and appointing officials before the scheme is passed by this House?

Mr. Dalton: No, Sir, it is not at all irregular.

Mr. A. Hopkinson: Do we understand that, whether the coupons are used or not, the jobs are to go on?

Mr. Dalton: I have stated the position in my answer.

Sir J. Mellor: asked the President of the Board of Trade whether he will define the boundaries between the North of England and the Midlands, and between the Midlands and the South of England, for the purposes of the Fuel Rationing Scheme contained in the Annex to Command Paper 6364?

Mr. Dalton: These boundaries will be published in due course.

Oral Answers to Questions — WAR RISKS (LIFE INSURANCE).

Sir J. Lucas: asked the President of the Board of Trade whether his attention has been called to the reluctance of many insurance companies to accept special war risk life insurances except at prohibitive premiums, or at all; whether he is aware that while one company has doubled its rates from £1 1s. per cent. to £2 2s. per cent. for ordinary civilians for death or serious injuries, with 50 per cent. increase for full-time air-raid precautions workers, Lloyds have halved their rates to 12s. per cent. for the full risk; and what steps he is taking to prevent the public being exploited and to look after their interests?

Mr. Dalton: The rates of premium against the risks in question vary with the terms of the policies issued, but are not capable of precise actuarial calculation. The Government have already made provision by the Personal Injuries (Civilians) Scheme for the payment of compensation for war injuries to members of the civilian population, and cannot undertake the financial responsibility which would be involved in any scheme of Government control of the rates of premium charged by insurance interests for voluntary supplementary cover.

Sir J. Lucas: Cannot the Government allow the public to buy Lloyds policies through post offices? At present it is very difficult for an ordinary member of the public to obtain a Lloyd's policy. It would be a great advantage and would make all the difference in the world from getting 22s. 6d. a week and a lump sum?

Mr. Dalton: My hon. and gallant Friend put down a Question on this subject to the Chancellor of the Exchequer on 19th May, and my right hon. Friend and I have gone into the matter very carefully and see great difficulties in doing what he suggests.

Mr. Mack: Would it not be possible for the Government to suggest to the companies a reduction in the rates of premiums comparable to the risks and cover involved?

Mr. Dalton: The difficulty is to estimate the risk. In this case it is not capable of precise actuarial calculation.

Mr. De la Bère: Notwithstanding the great difficulties, if it is just, ought it

not to be done? Why are there always great difficulties in doing away with an injustice?

Mr. Dalton: Perhaps my hon. Friend will make some suggestions to me with a view to overcoming the difficulties contained in the Question

Oral Answers to Questions — SLUDGE GAS.

Mr. Evelyn Walkden: asked the President of the Board of Trade whether the sludge gas produced by the sludge digestion plants owned by the various sewerage boards and local authorities in the country is being utilised to the full; and whether the daily wastage of many millions of cubic feet of this valuable supply can now be avoided and diverted to neighbouring gas undertakings, or whether the rigid covenant and restriction as between gas and electricity undertakings may now be relaxed so as to ensure that the wastage of sludge gas is eliminated?

Mr. Dalton: There are difficulties in making general use of sludge gas. It has been found in many places that it is most economical to use this gas to supply the requirements of sewerage pumping stations. It is also used instead of petrol for transport purposes. I am not aware of any rigid covenant or general restriction preventing electricity and gas undertakings from using the gas if it can be made available.

Mr. Walkden: Can the President of the Board of Trade tell the House what is being done by his Department to put into effective operation the recommendations and findings of the Traction Gas Committee, which sat under the chairmanship of Lord Strabolgi?

Mr. Dalton: That is another question.

Oral Answers to Questions — FRAUDULENT CHARITABLE APPEALS.

Mr. Keeling: asked the Secretary of State for the Home Department whether his attention has been drawn to the conviction of a clergyman for the misuse of large sums of money collected from the public during the last 14 years through charitable appeals by circular and advertisement; and, in view of previous similar


frauds, whether he will appoint a committee to consider the registration of persons making such appeals and the supervision of their accounts, subject to the exemption of approved charities?

The Under-Secretary of State for the Home Department (Mr. Peake): Yes, Sir. It is satisfactory to find that the law has not proved ineffective to deal with these serious offences. When the general question of the supervision of charities was inquired into by a representative Committee in 1927 they came to the conclusion that the fraudulent gains of a few rogues amounted only to a very small part of the vast sums which are given for charity, that these frauds were not likely to remain undetected for long and that the existence of these occasional abuses would not justify a general system of supervision over charities. Since then Parliament has passed the House to House Collections Act, 1939, and the War Charities Act, 1940. Whether any further strengthening of the law is practicable and desirable is a matter which is receiving consideration but it should not be assumed that the recent conviction of one individual necessarily indicates the need for an amendment of the existing law.

Mr. Keeling: How does my hon. Friend reconcile the first part of his reply, which expresses satisfaction with the present law, with the fact that these frauds continued for 14 years before the offender was brought to justice?

Mr. Peake: It is true that the frauds began in a small way 14 years ago, but it is also true that no inquiry, and no system of registration, could ensure that such frauds never took place.

Mr. Keeling: What is the objection to applying the system which so satisfactorily controls house-to-house and street collections to this graver evil?

Mr. Peake: I have informed my hon. Friend that the matter was inquired into in 1927, and that a Bill was introduced into Parliament, and the general feeling at that time was opposed to any such general system.

Mr. Messer: Will not the hon. Gentleman agree that if everyone was properly maintained, there would be no need for these charities?

Mr. R. G. Morrison: May we take it that the mind of the Home Office is not closed?

Mr. Peake: By no means. I have said that the question of possible further legislation is under consideration.

Mr. Levy: Is it not obvious that, where a fraud can be continuously operated for 14 years, there is indeed heed for the tightening-up of the law to prevent it; otherwise how does my hon. Friend know that frauds are not continuing in a large number of cases?

Mr. Peake: There are other kinds of fraud which have also gone on for a long time.

Oral Answers to Questions — LAID-UP MOTOR CARS.

Sir J. Mellor: asked the Home Secretary whether, in view of the ability of the Government to requisition the tyres of laid-up motor vehicles, he will direct regional commissioners to suspend the issue of orders requiring essential parts to be deposited with the police?

The Joint Parliamentary Secretary to the Ministry of Home Security (Miss Wilkinson): My right hon. Friend has this matter under review, in consultation with my right hon. Friend the Minister of Supply.

Oral Answers to Questions — MILK (PASTEURISATION).

Mr. David Adams: asked the Parliamentary Secretary to the Ministry of Food whether it is now decided that all milk for human consumption passing through milk depots will be pasteurised before being supplied to the public; is it intended to pasteurise all designated grades of milk below T.T. standard, as from records of medical officers of health much dangerous and unsatisfactory milk is being delivered under other designations; and whether milk delivered direct from producers to wholesalers will be pasteurised also?

The Parliamentary Secretary to the Ministry of Food (Major Lloyd George): As stated in Paragraph 6 (F) of the Memorandum on Milk Policy which was presented last week, milk which passes through depots will, so far as possible, be pasteurised before it leaves the depot or be brine cooled and delivered to a whole-


saler or retailer who can pasteurise the milk before supplying it to the public. As regards the second and third parts of the Question, pasteurisation will be arranged to the maximum extent compatible with the need for economy in transport.

Mr. Adams: Have not the Government declared themselves for years past in favour of pasteurising all milk in the interests of public health? Cannot this now be achieved totally for the whole country?

Major Lloyd George: Practically all the milk going to depots is pasteurised. The difficulty arises with the small producer-retailer who sells direct. Every possible effort is made to pasteurise it, but some of the small people have not the machinery, and, with the movement of milk controlled as it is, it is very difficult in war-time. But in the case of milk going to the depots practically 100 per cent. is pasteurised.

Viscountess Astor: Would it not be wise to pasteurise all Grade A milk?

Dr. Edith Summerskill: Does not the right hon. and gallant Gentleman think it would be in the interests of the country to prohibit the sale of any unpasteurised milk?

Mrs. Tate: As many people loathe pasteurised milk, can we not have a free choice in the matter?

Mr. Woods: Is it not the case that a good deal of milk at present is wasted because it is not pasteurised, and would it not be a great economy if there could be a further extension of pasteurisation in spite of the difficulties in the way?

Oral Answers to Questions — BOMB EXPLOSION, SOUTHWARK.

Mr. Naylor (by Private Notice): asked whether the Home Secretary has any information to give to the House concerning the explosion which occurred in Southwark on Saturday last?

The Joint Parliamentary Secretary to the Ministry of Home Security (Mr. Mabane): Examination of the site and of bomb fragments which have been found shows that the explosion which occurred

about 9.30 p.m. on Saturday, 6th June, at Gurney Street, New Kent Road, Southwark, was due to a bomb which, having wrecked a house during the raid of 10th May, 1941, buried itself without exploding under the adjoining premises which have now been destroyed. Both on examination immediately after the raid in May, 1941, and subsequently in the course of the demolition of the damaged building, nothing was found to suggest the presence of an unexploded bomb. I am sure the House will wish to join with my right hon. Friend in expressing our deep sympathy with the relatives and friends of all those who have been killed or injured by this belated result of the enemy's indiscriminate bombing of London.

Mr. Naylor: In view of the importance of the matter to other bombed areas, will the result of any inquiry which may yet be made and the conclusions arrived at be communicated to other A.R.P. services? Also would not the hon. Gentleman agree that in this case the Southwark A.R.P. services responded promptly and courageously to this unexpected call on their services?

Mr. Mabane: The full resources of the Ministry of Home Security are being put at the disposal of the London Regional Commissioners, who are conducting an inquiry. The results of the inquiry will, of course, be made available to all those concerned with the operation of the Civil Defence service. In reply to the last part of the question, I should like to say that, although there was no alert, the manner in which the Southwark Defence Services responded was remarkable in its speed and skill.

BUSINESS OF THE HOUSE.

Major Milner: May I ask when the Motion in the name of the Leader of the House with regard to Members' passes will be taken? This Motion is no doubt justifiable, but it is of considerable importance to private Members, and the House will be glad to know when it is proposed to take it. Is it possible to fix a specific time?

Sir S. Cripps: It will depend on the progress of business to-day. If there is time, it is proposed to take it to-day before the House rises.

PRIVILEGES.

Report from the Committee of Privileges (on the matter of the Complaint made on 7th May), brought up, and read; Report to lie upon the Table, and to be printed. [No. 93.]

Special Report from the Committee of Privileges brought up and read as follows:

1. Your Committee have considered the matter of the complaint made upon the 5th May of an alleged disclosure by a Member of a portion of the proceedings in the Secret Session of the 23rd April, and have come to the conclusion that they cannot discharge the duty imposed upon them by the House properly without alluding in their Report to some of the things said, or alleged to have been said in Secret Session.

2. If the secrecy of the proceedings at these sessions is to be preserved it will, in the opinion of Your Committee, be necessary to except their Report from the operation of the Resolution of the House of the 13th August, 1835, which provides that all parliamentary papers and reports printed for the use of the House shall be accessible to the public by purchase, and requires a sufficient number of extra copies to be printed for the purpose. Your Committee therefore suggest that their Report, together with the Minutes of the Evidence taken before them, should be ordered to be printed for the use of Members only, that an order to this effect should be made before it is presented, and that not more than six hundred and fifteen copies should be printed.

3. Moreover, as it is by no means clear that once the Report had been presented to the House the disclosure of the contents of the Report or of the Evidence or of any portion or summary thereof, would constitute a breach of privilege—on the contrary, as the Speaker stated on the 4th July, 1893, there has been a prevalent impression that when a Committee's report is laid upon the Table of the House it at once becomes public property—it would be advisable that, before the Report is presented, the House should resolve that the disclosure of any of its contents or of the evidence will constitute a breach of Privilege.

4. In order to obviate as far as possible the risk of the contents of the Report and the Evidence being inadvertently dis-

closed Your Committee suggest that the following procedure should be adopted:—

(a) The Report should be printed by those who are entrusted with the printing of secret documents. The printed copies of the Report should be numbered and placed in envelopes bearing a corresponding number, which should be sealed and delivered to the Vote Office.
(b) Every Member should be entitled to obtain a copy of the Report on applying personally at the Vote Office. He should be required to give a receipt for his copy.
(c) When the consideration of the Report by the House is concluded, or, if the Report is not taken into consideration within whatever may be considered a reasonable time, then as soon as the period has elapsed Members should be required to return their copies of the Report under cover to the Vote Office, such cover to bear the number of the copy it contains. The Clerk of the House should be directed to preserve one copy (or two copies) and cause the remainder to be destroyed.

5. Your Committee propose to defer making any Report upon the subject matter of their reference until the House has had an opportunity of considering the suggestions which they now offer.

Report to lie upon the Table.

BUSINESS OF THE HOUSE.

Ordered,
That the Third Reading of the Finance Bill may be taken immediately after the consideration of the Bill, as amended, notwithstanding the practice of the House as to the interval between the various stages of such a Bill."—[Sir S. Cripps.]

Orders of the Day — FINANCE BILL.

As amended, considered.

NEW CLAUSE.—(Reduced duty on certain tobacco.)

As respects manufactured tobacco issued free to inmates of public institutions by local authorities the rate of duty per pound shall be one pound two shillings.—[Sir R. Bird.]

Brought up, and read the First time.

Sir Robert Bird: I beg to move, "That the Clause be read a Second time."
The purpose of the new Clause is to preserve to the unfortunate inmates of Poor Law establishments an amenity to which they attach considerable importance, namely, the solace which they draw from a little tobacco. The inmates of Poor Law institutions stand on the lowest rung of the social ladder. They have no association or body to safeguard their interests and no one in this House specially charged to speak for them. They are, therefore, really the charge of the whole House, and I hope that the plea I shall make to the Chancellor will receive support in every quarter of the House. Parliament of late has devoted a considerable portion of its time to legislation and regulations directed to soften the rigour of the Poor Law, and it has sought in particular to infuse into them a spirit of humane administration. On the whole it is generally conceded that the intention of Parliament has met with a good deal of success, but ironically, by the accident of war taxation, Parliament is imposing taxes which directly menace something which softens the inevitable hardship of the Poor Law. The extra taxes on tobacco mean that the tobacco of the Poor Law inmates is directly threatened.
The practice of social welfare committees of Poor Law institutions is to make free issues of tobacco weekly. For the

most part they are of the order of one ounce for each individual. One ounce is not very much, and I have heard it described by a moderate smoker as a mere pittance. The aggregate of these pittances, however, amounts to a considerable total and represents a heavy charge on the funds of social welfare committees, and ultimately, through them, on the ratepayers. No figures are available for the whole country to show the aggregate of the charges for the issue of free tobacco, but I have some figures relating to the Poor Law institutions of the county borough of Wolverhampton. The figures of one institution may serve to give some notion of what the charges are. For the New Cross Institution in Wolverhampton the social welfare committee purchase rather more than £35 worth of tobacco a week, which is at the rate of £1,750 per annum. That was the figure paid under the old rates of duty. When the new duty of £800 is added, the figure will be £2,550. That in the end is a charge for this small amenity upon the ratepayers. I am sure that the ratepayers of Wolverhampton, any more than the ratepayers of scores of other localities, do not grudge this charity, but they feel that the extra duties place an unfair strain upon it and that if this pittance is to remain untouched, it should be by means of some national charge and not a charge locally upon the rates.
In support of that view, and of their strong feeling on the subject, they urge that, already, a differentiation has been made in respect of the extra duty, in favour of those smokers who are serving in the Forces. Men and women serving in the Forces, in the flower of their age, are able to purchase tobacco with no restriction as to quantity or as to cost. On the other hand, you have this large body of unfortunate people, who have given their services to the nation, who have fallen into misfortune and who find this little amenity, which they value so highly, threatened by the imposition of a new duty, so that it may be whittled down from a pittance of one ounce until it becomes no more than a token. Furthermore, it is urged that the House of Commons has affirmed more than once the principle that war taxation shall be spread nationally and that the burden shall not fall upon localities. That is one more reason for granting an extension of the differentiation already made in the case


of the Forces in respect of this increased duty.
Finally, there is another aspect of the question of this free issue of tobacco. It is also an acknowledgment to the recipients of duties undertaken by them in the institutions. The inmates of Poor Law institutions, and particularly those who are mentally affected, are not readily persuaded to undertake menial duties and to perform services at meal times and the like. In normal times the giving of such services has a considerable part in the carrying-on of the institutions. In wartime, these services take on an even greater value, and if you whittle away the recompense given for those services—and the supplement of one ounce of tobacco is bound to diminish if relief is not given—then the inducement disappears. If the Chancellor of the Exchequer still hesitates to grant this concession, I feel it can only be because he is haunted by the spectre of the black market. I assure him that the risk of abuse if the concession is made is insignificant. In the first place, the quantity of the free issue of tobacco is in direct relation to the number of recipients, and the variation in those numbers is so small, that it could be entirely disregarded. Again, that kind of tobacco which is issued to the inmates of institutions is not the kind which appeals to the general public, and lastly, those tobacco supplies are under the control of public officials. Although this is a small matter, I hope the House will feel that it merits their attention and that I shall gain support for my plea. I speak not merely for Wolverhampton and the 1,000 or 1,500 Poor Law inmates there but for the thousands scattered throughout the country who, for the most part, are advanced in years, who are broken in fortune, often broken in body and sometimes broken in mind.

Sir Patrick Hannon: I beg to second the Motion.
I gather, generally, from my observation of the Chancellor of the Exchequer, that he is, to-day, in his most benevolent mood, and I can easily conceive how much he has been affected by the stirring plea of my hon. Friend the Member for West Wolverhampton (Sir R. Bird). The case which he has made is bound to excite the sympathetic consideration of my right hon. Friend. It is a small matter, in a

Budget of this magnitude, to make a concession of this nature, and I trust that the Chancellor of the Exchequer will, in this instance, follow that general feeling for those in distress which has been exemplified continuously by him in his expositions of public finance in this House and will receive this plea sympathetically.

The Chancellor of the Exchequer (Sir Kingsley Wood): My two hon. Friends have exhibited once again their generous and kindly feelings, and I reciprocate all the compliments which they have paid to me. I wish, however, that they had been a little more precise as to the meaning of the proposed new Clause, and perhaps I might then have followed more clearly the effects it might have if it were passed. There is no suggestion here, I can assure the House, of any threat to any old people who are inmates of public institutions. There is no threat, as far as I am aware, that they will no longer receive the allowance of tobacco which has hitherto been made to them as inmates of these institutions. It would, indeed, be a sad reflection upon the administration of the local authorities of the country if, because there had been some addition to the Tobacco Duty, those local authorities were to discontinue to supply old people in institutions with the allowance of tobacco to which they had been accustomed. I do not think such a proposal could be contemplated. I do not believe for one moment that any authority in the country would take up such an attitude. I cannot conceive that the Wolverhampton authority, for instance, would say to the inmates of its public institutions, "I am awfully sorry, but the Chancellor of the Exchequer has put a certain additional duty on tobacco, and as a consequence, there will be no more tobacco for you, my good friends." I am sure Wolverhampton would not do such a thing, nor would any other local authority.
In fact all this proposal means is a relief not to the old people but to the Wolverhampton ratepayers of whatever the amount involved may be—I should think an amount of a trifling character, for there are not likely to be more than 1,500 inmates in the local institution. It is not a question of the old people, and we need not weep any tears over them; and it is not a question of any comparison with what the Forces are getting. What we are concerned about is the question of the £800 or whatever the amount


may be that falls on the Wolverhampton rates. We have had no representations from the local authorities of the country about this. If, in fact, it were found that the increase in the Tobacco Duty bore hardly upon the ratepayers of the community, I have no doubt the local authorities would come along with representations about it. When I was Minister of Health I never found any backwardness in coming forward, on the part of the local authorities, when any question arose about burdens being imposed on the ratepayers. I never found any hesitation by them to take up such matters; and, as the House knows, there are particular arrangements between the Ministry of Health and the local authority for dealing with payments in their respective spheres. If at any time this increase in the duty loomed very large in their minds, I am quite sure they would approach the Ministry of Health—not that I want to give them any encouragement to do so—but I cannot conceive that they would seriously go to my right hon. Friend the Minister of Health and say, "We have a very serious matter to put before you, this addition to the tobacco duty as it affects the poor inmates of our public institutions; will you give us a special addition to the block grant on that account?" In any event I can assure my two hon. Friends, as I am most desirous to do, that the inmates of public institutions will not be affected, because any relief which we gave under a new Clause of this sort—even if it were in the proper form (and this one has not been drafted in a very skilful manner)—would not concern the inmates, but would be a measure of relief to the ratepayers. If there is to be some measure of readjustment in this respect, that is not the way in which it should be effected. Therefore I hope that my hon. Friend, reassured, as he must be, about the 1,500 inmates of the Wolverhampton institution, will be prepared to withdraw this new Clause.

Mr. A. Edwards: The Chancellor of the Exchequer said that he had not been approached by local authorities in this matter. I think that is incorrect.

Sir K. Wood: I was referring to the association of local authorities.

Mr. Edwards: I know that my local authority did make representations. Do

I understand him to say that if in any institutions the inmates do have their allowance of tobacco reduced, he will then seriously consider the matter?

Sir K. Wood: No, Sir. I will trust my right hon. Friend the Minister of Health to take any appropriate action, but I cannot conceive any authority endeavouring to stop the free issue of tobacco to the inmates on account of the Budget proposals.

Mr. Messer: That is a point to which I wish to make a reference. As I understood it, the whole argument of the mover of the proposed new Clause was that unless some concession were granted old people would be getting less tobacco. It was also said that there were some inmates who did a type of work which it was not easy for the authorities to get other people to do and who were bribed by an ounce of tobacco additional to the basic ration. It is true that something in addition to the basic ration is given to inmates who do certain kinds of work. It was suggested that, whatever may be the price of tobacco, that inducement ought to remain, because if it were withdrawn the work would not be done so readily. My special reason for rising is to make it plain to the House that I do not believe that the implications of the argument bear any relation to the facts or that public assistance authorities will reduce the ration of tobacco because of this added duty. I do not think public assistance committees would be so petty or small-minded as to say that an old man must have a reduced amount of tobacco merely because the Chancellor has put up the tax. I should like to see something done to meet certain aspects of the case, but this is not the way to do it.

Sir R. Bird: After the statement from the Chancellor of the Exchequer, I beg to ask leave to withdraw the new Clause.

Motion, and Clause, by leave, withdrawn.

NEW CLAUSE.—(Increase in standard profits in case of certain mining and other trades or businesses.)

If, upon an application made in relation to any chargeable accounting period by a person carrying on any trade or business which consists of the getting of minerals or oil from any mine, oil well or similar natural source of a wasting nature, being a trade or business the


Standard profits of which are the statutory percentage of the average amount of the capital employed in the trade or business, with or without an increase under section thirty-one of the Finance Act, 1941, the Board of Referees are satisfied that the date by which the source is likely to be exhausted is such that the standard profits are insufficient to allow for the amortisation of the expenditure of a capital nature incurred in the establishment of the trade or business and to leave to the persons carrying it on a reasonable profit, the Board may order that the standard profits in the case of that trade or business shall, in relation to that chargeable accounting period, be increased to such extent as may be specified in the order.—[Mr. Brooke.]

Brought up, and read the First time.

Mr. Brooke: I beg to move, "That the Clause be read a Second time."
I am sure there is unanimity in the House that the higher we raise the general level of taxation the more essential it is that we should make certain as a Parliament that that taxation falls equitably as between one taxpayer and another. That principle has been endorsed not only by the Chancellor but by hon. Members in all parts of the House. In this new Clause I am bringing to the attention of the House, I believe for the first time since the Excess Profits Tax was introduced, a type of case where, in fact, that tax is operating not merely to remove excess profits, not merely to remove the whole of the actual profit that a company is making, but even to bite into the shareholders' capital as well. May I have the courtesy of the attention of the House to explain this rather complicated matter? Hon. Members know that in the case of mining companies a portion of any profits they make and any dividends they pay has to be regarded as repayment of capital, because with a mining company as distinct from other companies a wasting asset is being used up, and at the end of the life of the mine the shareholders will have no realisable asset left. This principle, which is recognised throughout the accountancy profession, has rightly been recognised by the House, and in the Finance (No. 2) Act, 1940, a special provision was inserted in Section 13 to allow mining companies in certain circumstances to have their standard profits increased by not more than 4 per cent. of the capital employed, as compared with companies of another character.
That solution is a reasonable one for this difficulty in the case of mines and other natural sources which have a long life. Four times 25 is 100, and the House will see that by that 4 per cent. a company working a mine with a life of 25 years or more may amortise its capital over the life of the mine, and recognition is given to that before Excess Profits Tax is charged. It is quite otherwise, however, in the case of mines with very short lives. There are mines with a life of not more than 8 or 10 years, and an allowance of only 4 per cent. for a mine which will be exhausted in 8 or 10 years is, in practice, not going to permit the company to repay by way of dividends to its shareholders even the original capital they had invested. There is at present no way out of this situation. In the Finance Act, 1941, the Chancellor inserted in Section 31 a provision relaxing the Excess Profits Tax standard in the case of those mines which, owing to wartime conditions, are using up their mineral assets more rapidly than they otherwise would do, but that, again, applies only to a limited class, and it does not in any way meet the needs of those short-lived mines which were in the development stage immediately before the war and which in war-time not only lack the machinery to work at a higher rate than was originally planned but, owing to all kinds of higher costs, are directly through war causes making a lower profit than they would otherwise have made. Those companies, because they were developing in the years immediately before the war, have not got the normal profit-standard based on the standard years, and they are charged Excess Profits Tax at 100 per cent. on all earnings beyond 12 per cent. of their capital. They are allowed 8 per cent. per annum, that being the standard allowance for all new companies, and an extra 4 per cent. under Section 13 of the Finance (No. 2) Act, 1940, making 12 per cent. altogether. I could give the House examples of companies of this character which, so long as everything above 12 per cent. is sliced away by Excess Profits Tax, cannot possibly, during their eight or 10 years' life, repay to the shareholders even the amount of capital originally invested.
This position is reasonably met by minute taxation in other countries. In


the Union of South Africa, where, of course, a great number of other mining companies are registered, there has been upon the Statute Book for some time a capital redemption allowance, and the case of mines, whether of short life or of long life, is properly met by their capacity to claim this capital redemption allowance before Income Tax is charged. In this country we have no such capital redemption allowance. A mining company not entitled to benefit from Section 31 of the Finance Act, 1941, has no safeguard, except that extra 4 per cent. which is allowed by the Finance (No. 2) Act, 1940. The new Clause which I propose would apply to companies which commenced operations after 1st July, 1936, that is to say, companies which in the normal standard years had not reached a development stage where they were making a profit which could be taken as their standard. It provides that, in the case of those companies, in any chargeable accounting year, if the Board of Referees are satisfied that the mine or other concern is of such short life that the standard profits—that is to say, the profits of 12 per cent.—are insufficient to allow for the amortisation of capital expenditure within the life of the mine and to leave to the persons carrying it on a reasonable profit, the Board may order that the standard profits may be increased to such extent as they think fit.
The Chancellor is a much wiser man than I am. He may know much better ways of dealing with and removing this injustice. I have had to use the word "reasonable." We already have provisions upon the Statute Book which empower the Board of Referees to make such increases in percentage allowances as they "think just." I hope that the Chancellor will not criticise the proposed new Clause simply on the ground that the word "reasonable" is undefined. There must be some phrase to authorise the necessary discretion to the Board of Referees. I hope I have made clear to the House in this short speech that a genuine case of severe injustice exists here, and I look to the House and to the Chancellor of the Exchequer to find some satisfactory means of remedying it.

Mr. Spens: I beg to second the Motion.
My right hon. Friend will not be surprised to find I am only too ready to do so. This question of how undertakings carrying on mining and other wasting asset operations should be treated for E.P.T. started at the very first moment when the proposals were introduced, and it has been the subject of Debate in this House and attention elsewhere, during the period of existence of the tax. In the proposed new Clause, one limited and very obvious instance is taken, and the Government are asked to deal with that case. It is the most obvious instance of the injustices that exist as between one undertaking and another and that have come to light during recent months. The undertaking which was about to be developed, or was in the developing stage when the tax was introduced, was obviously planned to continue an ordinary business, or what was expected to be normal, when the war was looming in the distance or it was an actual fact.
Events have been far too strong for forethought or planning in connection with the mining industries. In the national interest it has been absolutely necessary to concentrate, and it will be necessary to do so still more, upon the deposits which are most easily and quickly got at. The result has been that certain mines have been literally stripped as hard as they could be stripped, every day, week and month, in the national interest. In other words, far more of the mineral is being extracted from the earth than anybody with the wisest foresight could have anticipated two or three years ago. The Government are taking, in the guise of this 100 per cent. E.P.T., vast proceeds which they would never have seen had it not been necessary to deal so ruthlessly, if wisely, with these undertakings. It is, therefore, unarguably necessary that something should be done. This point does not apply only to new mines but equally to older mines where the same intensive extraction of mineral is being carried out for war purposes. Difficulties always face back benchers in putting forward Amendments dealing with anything more than one narrow point. I therefore propose to confine my remarks to this one narrow Clause, having made these few remarks.
The proposed new Clause involves giving a certain discretion to the Board of Referees. I know that the Chancellor has found it very difficult in the past to


give them any real discretion. Rightly, he has felt that it is the duty of this House to tax and not the duty of any subsidiary body. In this Clause we have tried to put in a ceiling by which we suggest it is possible for the Board to come to a definite conclusion, namely, that whatever additional relief they give must be limited by the limited life of the mine. I see my right hon. Friend looking at me; he knows as well as I know that the estimation of the life of a mine is not always a very easy thing, but, on the other hand, if there is a certain course of working going on at present, it is not beyond the powers of experts in this country to be extraordinarily accurate as to the time it will take to finish off, at that rate, the working of a particular mine. I therefore urge my right hon. Friend that there is nothing at all impossible in what we are asking in this Clause; by this provision, or something very like it, a very grave injustice as between one undertaking and another could be mitigated. It is on those grounds that I submit this matter to my right hon. Friend and to the House as being an urgent problem and one which is causing grave dissatisfaction in many parts of the country, and indeed, so far as English countries are concerned, in places outside this country as well. This is a remedy for it, and I hope the House and my right hon. Friend will think that it is a feasible remedy. I beg to second the New Clause.

Mr. Benson: I am not particularly enamoured of the way in which this Clause is drafted. There are certain difficulties which will probably loom very large in the eyes of the Chancellor when he considers it, but on the other hand I am not at all satisfied with the general situation as to the taxation of wasting assets. The matter is very complicated, I know, because there are so many different financial arrangements relating to so many different material circumstances in the mining of wasting assets that the problem must essentially be one of extreme difficulty. On the other hand, the formula set out in the Schedule to the 1941 Act is a very simple and very narrow formula, and I doubt whether in a very great number of cases justice is really done. In certain cases it could not be, and the allowance made under the 1941 Finance Act Schedule does and must work out very much less than, for example, the effect of depreciation and

obsolescence in the case of machinery. Frankly, I do not see any reason why capital invested in a rapidly-wasting mine should be treated any differently from capital invested in a machine tool, which may be worn out, as a result of war activity, in three or four years instead of in 10 or 15 in peace-time. Capitalists ought to be treated with a reasonable degree of equity as between one and another, and we must see that as far as possible the taxation imposed by this House is equitable under given circumstances.
There is another point, and that is that in the case of a wasting mine the very proper restrictions which have been placed by the Chancellor on the 20 per cent. return of E.P.T. cannot apply. That return of E.P.T. will be for the purpose of re-equipment, but an exhausted mine cannot be re-equipped, and therefore in a very large number of cases that 20 per cent. will be prevented from finding its way back to the mine owner. I am not in any way under-estimating the difficulties of achieving equity in this case. Take, for example, the case of a mining company which has a known short life. It pays very high dividends and may have repaid its capital several times over, but the high rate of interest reflects itself in the market price of the shares, and there are people who have invested recently in this company at market prices. They suddenly find that under war conditions the effect of E.P.T. is that they will not get their investment back.
One could multiply all kinds of anomalies and give examples of various hardships which the formula will not and cannot meet. Whether a formula could be devised, or will be devised, I do not know, but to hand over to an entirely independent body like the Board of Referees the power to fix what rate of interest shall be paid is to a very large extent abrogating the right of this House, and I am as unhappy about the remedy suggested as I am about the formula of the 1941 Act. I would be more prepared to accept the idea that the Board of Inland Revenue should have some discretion in this matter, though there again there are very great difficulties. I would ask the Chancellor, in view of the fact that grave injustices are arising and must arise in connection with rapidly-wasting assets, whether he cannot think of


some improvement on his 1941 formula with a view to seeing that our taxation approximates more to justice than it does at the present time.

Mr. Colegate: I should like to support this Clause. Reasons have already been given why it is only equitable that something of this kind should be done, but there is one additional reason which I would like to emphasise, and that is that in the case of the coal industry we shall shortly have before us a series of proposals for Government control. In the course of the operation of that control it is quite clear that the Government may, if they find it necessary, reverse the ordinary prudent methods by which mines are operated and, in the case of certain properties, may insist that they shall be exhausted far more rapidly than normally would be the case. Under the present legislation the owners and shareholders will suffer very serious injustice. Already, in the case of one small mine in my own constituency to which my attention was drawn only yesterday, the Board of Trade have asked the owners to work a deposit of coal, which they had intended to develop over a period of 15 or 20 years, at a rate which would exhaust it within three or four years. It may not last as long as that—we hope it will not—but, unless some such provision as this is made, many proprietors and shareholders in the mining industry will suffer great injustice. Therefore, I appeal to the Chancellor to accept either this Clause or some equivalent remedy.

Mr. S. O. Davies: I hope the Chancellor will resist this Clause. I do not think these are the times for undue, or, shall I say, continued, preference to those who merely invest their spare cash in the mining industry. I might not object to this Clause if, from the Benches opposite, there were shown for the miners one-thousandth part of the concern which is invariably shown for those who have merely invested some of their money in the industry. The usual emphasis has been placed upon the fact that the mining industry is a wasting asset. It is very much indeed a wasting asset, and a great deal of the waste is due to irresponsible wastrelism on the part of those who are responsible for the mines. This Clause asks that, in addition to profits being returned on investments in the mining industry, the capital shall also be returned

to the investors. Those who are engaged in the industry have at last come to understand the profound partiality which is shown to those who merely have their money invested in the industry, while so very little regard is shown for those whose whole lives are involved. When we talk of coal being a wasting asset, let us remember that if a colliery closes down, the district which depends on that colliery becomes derelict. There is no talk about the wasting assets of the homes of those engaged in the industry, in which their whole lives' savings may be sunk. This Clause raises the old historical issue of partiality, and I hope that, in view of the present situation, the Chancellor will have no hesitation in rejecting it.

Sir K. Wood: I think my hon. Friend has mistaken the day. It is on the next Sitting Day that we are having the Debate on coal. Therefore, I do not propose to address my remarks particularly to—

Mr. Davies: I have not mistaken the day. It is always the day for the shareholder, but on very rare occasions is it, the day for the miner.

Sir K. Wood: Of course, we have heard my hon. Friend make those statements before. I would congratulate my hon. Friend the Member for West Lewisham (Mr. Brooke) on the Clause. This is the third attempt he has made to bring this matter before the House, and he is fortunate to have been able to put down a Clause which can now be discussed. I would also congratulate my hon. and learned Friend the Member for Ashford (Mr. Spens). Very wisely, he avoided referring to the terms of the Clause itself, contenting himself with addressing the House in general terms. I recognise that my hon. Friend has put forward a serious case. In connection with this and with other matters relating to E.P.T., there arise very difficult and hard cases. Many of them arise inevitably from the fact that we have increased E.P.T. to 100 per cent. We took that step largely on national grounds, and because of the necessity, as the Government thought, of taking such a course at that time, accompanied as it was by other steps which affected other sections of the community. My hon. Friend's proposal briefly stated is this: He desires, in the special cases that he has mentioned, where we are dealing with


the getting of minerals or oil from any mine, oil well or similar natural source of a wasting nature",
the trade may be granted by the Board of Referees an increase in the standard. The increase may be made, as my hon. Friend opposite has stated, where the Board of Referees are satisfied that the date by which the source is likely to be exhausted is such that
the standard profits are insufficient to allow for the amortisation of the expenditure of a capital nature incurred in the establishment of the trade or business and to leave to the persons carrying it on a reasonable profit.
It would appear that the amount of the increase is to be determined separately for each chargeable accounting period and for each individual concern which makes an application. In fact, no limit is placed on the discretion of the Board of Referees, who can award any percentage they think fit. It is important to remember that the particular concerns for which my hon. Friend has put forward a case belong in fact to a class of such concerns for which we endeavoured to make provision in Section 13 of the Finance (No. 2) Act of last year. We provided, in Section 13 (1), that:
Upon an application made with respect to any class of trades or businesses consisting in the getting of minerals or oil from any mine, oil well, or similar natural source of a wasting nature, the Board of Referees may by order direct that in relation to trades or businesses of that class the references in section 27 of the Finance Act, 1940, to six per cent. and eight per cent. and the references in subsection (9) of section thirteen of the Finance (No. 2) Act, 1939, to eight per cent. and ten per cent. shall be construed as if they were references to six, eight or ten per cent. as the case may be, increased to such extent as may be specified in the order.
The Board is permitted to do that in these classes subject to the proviso set out in the Section, the most notable item of which is that it shall not increase the said percentages in any case it thinks proper by more than a further 4 per cent. That was done deliberately. I remember the discussion in the Committee when it was considered that it was reasonable that some limitation must be made, and that limitation was fixed at 4 per cent. It was left that the concerns as a class should be able to apply as stated in the Section, and the Board would have power to make an increase in the percentage of capital to reflect the fact that the capital employed in mining the mineral had a shorter life than the life of capital expenditure in

general industry. The Clause of my hon. Friend does not interfere with the operation of that particular Section, so that a concern belonging to a class dealt with by the Section would in fact receive the benefit of any additional percentage on capital granted under that Section to provide for the comparative wastage of capital expenditure. Such a concern, as satisfies the Board, is entitled to relief in that circumstance.
But the first observation I would make about the Clause is that it is not clear—as, I am afraid, might be one of the consequences if the Clause was accepted by the House—whether it would not temporarily confer upon the particular concern a double relief. This I do not think my hon. Friend really proposes. The principal objection is that it introduces the concept of an allowance for the absolute amortisation of capital, which is quite different from the provision we have already placed upon the Statute Book for dealing with the comparative amortisation on which Section 13 is founded. I do not really think that that concept could possibly be entertained by the House. The whole idea of Section 13 is to give a special relief for capital employed in exploiting wasting assets because it has a shorter life than the ordinary industrial life. In these circumstances it is impossible for me to accept the proposal. I know one or two of the concerns which hon. Friends have in mind, and difficult and hard cases no doubt often arise, but I have made inquiries, and it appears that no application has been made by these particular concerns as a class to the Board of Referees under Section 13.
I hope my hon. Friend will not be too pessimistic. If he does not think that he may be afforded some relief under Section 13 of the Act, and seeing that I am bound to resist this Amendment, I would advise those concerns to test the possibility of relief under both Sections to which I have referred, before coming to the conclusion that these are inadequate. I cannot accept the Clause, for the reasons I have given and also because I do not think that the House would for a moment contemplate handing over unlimited powers to a Board of adding percentages. To say that these powers should be unlimited is something that we could not possibly countenance. I rely however mainly upon the other


reasons I have given to the House, and—my hon. Friend has been very persistent and has stated his case very well—in the circumstances of to-day, these concerns had better test the provisions which, as I have said, we have already made available to them.

Sir Adam Maitland: If my hon. Friend the Member for West Lewisham (Mr. Brooke) is satisfied with the explanation of the Chancellor of the Exchequer, it is not for me to press the matter further, but the longer this sort of thing lasts the greater will be the number of cases that will constantly come before the Chancellor of the Exchequer. His reply does not quite meet the case which the House has to face. In view of the imposition of such high taxation as obtains, we ought, as a House, to try and find means of seeing that legitimate cases of hardship are given opportunities of expression and that those in authority should have the opportunity of providing relief where hardship has been proved. My hon. Friend the Member for West Lewis-ham said he knew of cases where this particular impost was of a very hard and exacting nature upon the undertakings which he had in mind. He would not have made that statement unless he had the requisite knowledge and information to substantiate it.
As the Debate went on, another important point arose of which this House ought not to lose sight. We all accept the general suggestion that in these days of war private interests must be subservient to national interests, but I would ask the Chancellor of the Exchequer to bear in mind the fact that there is to be some alteration in the way in which concerns owning wasting assets are to be run. If these alterations are to be pursued with vigour, rigour and ruthlessness, and it would appear that the demand for coal may make that necessary, it would be most unfortunate if this House lost sight of the fact that by existing legislation, for which the Government themselves are responsible, the steps taken by the direction of the Government meant an addition to the hardships which would undoubtedly ensue to companies in the category to which my hon Friend the Member for West Lewisham has referred. I am not personally very much afraid, as the Chancellor of the Exchequer seems to

suggest, of giving to the Inland Revenue or the Board of Referees a greater discretion than they already possess. If I have any complaint at all against this authority, it is that, if they show any bias at all, it is always on the side of the Treasury. I am not afraid of extending to them a greater discretion.

Sir K. Wood: It is an unlimited discretion.

Sir A. Maitland: Even so—and I accept what the Chancellor of the Exchequer has said—as the Clause is framed, that unlimited discretion is not quite so unlimited as he suggests. It is limited to the point that the Board of Referees must be satisfied that the life of the mine will not exist beyond a certain period. Surely it is not beyond the ingenuity of man. If it is impossible to define precisely what the life of a mine is, it is not impossible for the Chancellor to say that he will give further discretion to the Board of Referees and say that if the life of a mine extends beyond that period, liability will remain. I think the hon. Member for West Lewisham has done a service in bringing to the attention of the House once more the fact that this duty at the rate of 100 per cent. has many grave and serious consequences. If those responsible for the control of mines have not the means to extend and develop them, the people who will suffer most through unemployment, and all that comes from improper direction and control, will be the miners. They are linked up with the matter just as much as the management. It is not a question of any class at all. I think the Chancellor is right not to accept the present form of words, but I hope he will consider that in these cases there ought to be provided means whereby hardship can be adjusted by the appropriate authorities.

Mr. Brooke: May I ask the Chancellor a question? If the companies whose position I have brought to the notice of the House act on the suggestion which he has made, and yet it still appears that after any allowances that they have been able to claim under the existing law they are still not in a position to preserve from the tax collector even their original capital, will he receive me sympathetically if I approach him again at that stage and ask him to investigate afresh the effect of 100 per cent. E.P.T. under the existing law on certain kinds of companies with wasting assets?

Sir K. Wood: I am always ready to receive my hon. Friend, but I would not care to answer a hypothetical question of that kind. I am hopeful, however, that these concerns will get some relief.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE—(Amendment with respect to war damage in relation to excess profits tax.)

Notwithstanding anything in the enactments relating to excess profits tax the Commissioners may make regulations to provide that where any trade or business suffers a loss of capital through enemy action the amount of excess profits tax payable shall be adjusted to ensure that the person carrying on the trade or business shall not be in a worse financial position than he would have been had there been no such loss.—[Mr. Cecil Wilson.]

Brought up, and read the First time.

Mr. Cecil Wilson: I beg to move, "That the Clause be read a Second time."
I would like to say in regard to this new Clause that it concerns many businesses in all parts of the country, whether small or large, which have in any way suffered from enemy action. The position which appears to have been taken is that all sufferers from war damage will be penalised except those on a substituted standard who suffer no detriment. The case I have in mind is typical of many others. A firm has a capital of rather more than £100,000, half of it in preference shares and half of it in ordinary shares. Prevously the standard profit was such that after paying preference share dividends there was enough left for a substantial dividend on the ordinary capital. But because of damage which has been sustained the standard profits are such that after dealing with the preference shares as before there is only enough left to pay a very small dividend upon the ordinary shares. This is not a matter which affects only one particular interest. The British Chambers of Commerce Association states in a letter:
Traders who suffer destruction of assets by enemy action should not have their misfortunes aggravated by consequential additional taxation. Nevertheless, this is the effect of the Revenue insistence upon excluding from capital for E.P.T. purposes not only the destroyed assets but also the amount of compensation under the War Damage Act.
That is a statement from a body whose views are certainly entitled to considera-

tion The Treasury says that no regard is paid to partial damage of premises that continue to be used in the business and that it is only where a complete unit is practically destroyed that the issue arises as to whether the standard should be abated. The firm to which I have referred have had everything completely destroyed. While they are endeavouring to carry on, they are doing so under circumstances which have no relation to those which previously existed. As to whether capacity has been maintained, that, I think, is answered by this statement. Whereas before they had one central set of premises, where everything was carried on in a perfectly easy manner, now they are distributed in all sorts of places. Out of the shopping centre of the city and in an entirely different district nine shops which have been deserted have been taken over and various sections of the firm's business have been put into them. This case is illustrative of a great many similar cases in other parts of the country, and I think we are entitled to a much more equitable arrangement than appears to exist at the present time. The Chancellor may say that he cannot accept this proposed new Clause or anything of the kind, but, if that is so, I hope his answer will be such that those who are feeling this very acutely will feel that they are not to be left in their present unjust position.

Sir William Davison: I beg to second the Motion.
I want to deal with a rather different point from that on which the hon. Gentleman opposite has spoken. I recently drew the attention of the Chancellor to the fact that the Inland Revenue are treating payments by the War Damage Commission in respect of capital invested in stock destroyed by enemy action as a constructive sale the profits of which are liable to Excess Profits Tax, notwithstanding the fact that the whole of such payment is required for replacement of the stock destroyed. Further, I asked the Chancellor whether he was aware that by treating total loss of the stock destroyed by enemy action as a constructive sale liable to Excess Profits Tax, he was placing traders in many cases in a worse position than if the goods had not been insured at all. The Chancellor did not seem to think at the time that that was possible, and he asked me to give him an instance. I gave him an in-


stance in connection with a whisky-blending company in which I was indirectly interested. This company has an Excess Profits Tax standard of approximately £6,500, above which all profits go to the State. The company's stock is insured for £126,000 at an annual premium of about £5,000. The purchase price was approximately £35,000. Should enemy action destroy the whole of that stock, the figure of £91,000 would be regarded as a trading profit, and therefore, £84,500 would return to the Government in the form of Excess Profits Tax plus the whole amount accrued from normal trading. Thus, the Company would have only £35,000 available for replacement, and at present prices would be able to replace only 25 per cent. of their original stock. All matured stock purchased at to-day's bulk prices could only be bottled at a considerable loss if sold at the agreed selling prices. As the company in these circumstances would only be able to trade at a loss, an old-established business would have to close down, with the consequential loss to home and export trade. I am sure that was never intended by Parliament.
I am fortified in the accuracy of the above case by receiving yesterday a letter from a firm in the North of England which trades as beer, wine and spirit merchants. They raised this matter some time ago, and said very much the same as I have just said. In the event of there being a total loss of their bonded stocks by enemy action, the whole amount of the recovery from the Government, less the original cost, would be paid over by them to the Government as Excess Profits Tax; no portion of such surplus would be retained by them, and they would only have available a sum equivalent to the original cost of the goods destroyed to replace such goods. In view of the difficulty at the present time of replacing similar goods, and the high price of replacement, they would be forced either to close down or to trade at a loss. At the time when I wrote to my right hon. Friend the Chancellor of the Exchequer, I had not seen the instance which I have just quoted. I cannot believe it is the desire of the Government or of the House that the Excess Profits Tax should be used in this way, which will involve the closing down of old-established businesses. Clearly that would be the result of the

position I have indicated to the House. If my right hon. Friend is not able to accept the new Clause, I hope at any rate that he will be able to give some assurance as to amending the law to prevent the loss of capital and also the loss which would be sustained in the replacement of stock in such cases as my hon. Friend opposite and I have described to the House.

Mr. Pethick-Lawrence: I wish to add a few words to what has been said by my hon. Friend the Member for the Attercliffe Division (Mr. Wilson). I imagine that both the House and the Chancellor will be anxious that, in administering the Excess Profits Tax, substantial justice shall be done to businesses and persons who come within its orbit. The question is whether in the type of case to which my hon. Friend referred and also, I have no doubt, the case mentioned by the hon. Member for South Kensington (Sir W. Davison), that is, in fact, what is happening. If it can be shown that something quite different is happening, there is obviously a case for some alteration, if not of the actual Finance Act, at any rate of the administration of it. To go over again the point that was made by my hon. Friend, this is the position which is envisaged. A certain firm are doing business from certain capital premises. Those premises are damaged by enemy action, and, with very great difficulty, the firm carry on their business in other ways. It may be that, as a result of their activities, they are able to keep their good will and achieve a gross profit not so very different from that which they had before. It might be thought then that they had got over their difficulties, and that they were entitled to give to their shareholders the benefit of the profit which they had succeeded in making in very difficult circumstances; but then the Chancellor's collectors come along and say, "But your standard originally was x thousand pounds annual profit; you have lost this large amount of capital, and therefore, we claim that in future, instead of your standard being x thousand pounds, it shall be x minus y thousand pounds"—a very much reduced figure if, in fact, the premises from which they were previously operating formed a substantial part of their capital in the business. The result would be that the figure of standard profit would be enormously reduced, and


the profit which they were able to make, instead of being available for their shareholders as it was before, would be very considerably curtailed. Quite clearly, that is not as it ought to be.
What this new Clause is designed to do is to give sufficient latitude to the persons who administer the Excess Profits Tax to enable them, in the case of firms which have been injured in that way by war damage, to secure the position of those firms on an equitable basis. That is the point of the new Clause. It is very likely that the Chancellor may not be able to accept the Clause in its present form, but I hope he will give some assurance at any rate that the administration of the law will be in accordance with general equity and not unjustly penalise over again people who have suffered great difficulty, hardship, and loss through having their premises destroyed by enemy action.

Sir K. Wood: The hon. Member for the Attercliffe Division (Mr. Wilson) has raised a matter of considerable importance to a number of people. It will be appreciated that I could not insert a Clause of this kind in the Bill. If any alterations were to be made, they would have to be of a specific character. However, the new Clause does give me an opportunity of stating the law and practices concerning this matter, on which there is, I think, a certain amount of misapprehension. I should like to explain, in the first place, the existing practice in relation to the incidence of Excess Profits Tax in cases where business assets have been destroyed or lost owing to enemy action. My right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) will recollect that the Excess Profits Tax takes as its measure of charge the excess of current profit over the profit earned in the prewar years. Where that pre-war profit was abnormally low, the datum line is fixed by reference to the capital employed in the business in the pre-war years, and generally comes out at 6 per cent. of the amount of that capital.
The first principle of the tax is the principle of comparison of like with like. It is only in so far as the capital employed in a business is the same to-day as it was in the pre-war years that it would be reasonable to measure the Excess Profits Tax by comparing the present profits with

pre-war profits, or with the percentage of pre-war capital. Where a business has expanded by reason of additional capital being employed in it, the pre-war standard is increased by 8 per cent. on the increase of capital, and, similarly, where capital is no longer employed in a business, it is necessary to adjust the pre-war standard; accordingly the law provides that, where there is a fall in capital employed, a deduction of the standard profits is to be made on an amount representing 6 per cent. of the fall in the capital. That is the general position for the treatment of an increase or a decrease in capital employed in a business, and the provisions are to be found in the Finance (No. 2) Act, 1939, which first imposed the Excess Profits Tax.
Now I should like to refer to the particular case to which my hon. Friend has called attention to-day—that is the loss of capital due to enemy action. I must emphasise that we are concerned to-day only with the incidence of the Excess Profits Tax in such a case, and that compensation for loss suffered owing to enemy action is a different matter with which at this moment we are not expressly concerned. Where capital represented by trading assets has been destroyed by enemy action or has been temporarily lost owing to seizure by enemy action, the capital so destroyed or so lost is no longer employed in the business, and the provisions of the law relating to a deduction of capital employed in the business are, therefore, applicable in all these cases. Take, for example, a shipping company with a fleet of 12 ships of which 6 have been lost owing to enemy action. In computing the excess profits for the six ships remaining in service, it would not be reasonable to take the pre-war standard representing the standard of profit of running 12 ships; accordingly that standard has to be reduced to 6 per cent. of the value of the six ships which have been sunk. The loss suffered in respect of the sunk ships is a question of, compensation which is covered by the insurance monies, and I may observe that any interest earned or accruing on such monies is outside the scope of the Excess Profits Tax.
Take the case which has been put today. Take a concern which has two factories, one of which has been completely destroyed. The standard for the measurement of the excess profits for the


remaining factory cannot be taken to be the standard applicable to the two factories, and an abatement has to be made in respect of the loss of capital represented by the destroyed factory. But, in applying its provisions one has to bear in mind the principle of comparing like with like, to which I have already referred, and in practice the application of this principle is directed to ensuring that the pre-war standard is only reduced where it is clear that the loss of capital has resulted in a corresponding fall in productive or profit-earning capacity. No regard is paid, therefore, to partial damage to trading assets, such as the damage to a wing of a factory, or partial damage to trading premises which still continue to be used for the purposes of trade. In general, where it is shown that the business has been carried on without any material impairment of its productive or profit-earning capacity, no deduction from the standard would be made in respect of any capital which may have been lost or destroyed.
A good example of this is to be found in the cotton industry. In that industry all the looms are not fully employed, and in certain cases a good neighbours arrangement exists under which the owner of a mill which may be destroyed by enemy action can take over the unused looms in another mill and carry on his normal production. The Revenue authorities have agreed with the cotton industry that in such cases the standard of the concern whose mill was destroyed will not be reduced by reason of the destruction of the mill. A further example, which may be of general interest, is the case where the premises of a trading concern engaged in the distributive trade whose shops or stores in the centre of our blitzed cities may have been destroyed. Where such a concern takes over other premises and carries on its business so that the profit-earning capacity remains substantially unchanged* no reduction will be made for capital lost, which would have the effect, taking into account such rent as may be paid for the new premises, of increasing the measure of the liability to Excess Profits Tax. That sets out the practice, and, of course, a statement of this kind requires careful consideration by those who desire to read and examine it. On the whole, I think that it represents a fair application of the principles of the law.

The Clause which stands in the name of my hon. Friend the Member for Attercliffe does not deal with a question that has sometimes been raised, and has again been put to me by my hon. Friend the Member for South Kensington (Sir W. Davison). I would say in reply to him that, if a trader has a stock of whisky worth, say, £100,000 and the stock is destroyed, he receives under the Government's insurance scheme £100,000; and is treated for taxation purposes in the same way as if he had sold the whisky across the counter for £100,000. The profit arising on the sale is taxed, and so is the profit arising on the payment for whisky stock which has been destroyed. The fact that a trader has to find finance for acquiring new stocks does not affect the liability to taxation, whether new stocks are rendered necessary by ordinary sales, or by compulsory sales which is the resultant effect of the destruction.

Sir W. Davison: The trader would not wish to sell £100,000 worth of whisky. He could not replace it. Everyone who is in the habit of buying whisky knows that you can only buy one bottle when before you might have been accustomed to buy a dozen. It means that the business is ruined. I stated in my speech that it means ruining the business and putting it out of action, because a trader cannot in present circumstances replace the stuff which has been destroyed. His business is, therefore, closed down. It is not the same thing to say that he could have sold £100,000 worth of whisky on the market and that he has received £100,000 from the War Damage Commission and, therefore, he ought to be very well pleased, because he is getting a quick sale.

Sir K. Wood: I will examine that case again. It has only just been dealt with. As a matter of fact, it is not dealt with so far as this Clause is concerned, and I hope that my hon. Friend will, in the circumstances, be satisfied with the explanation I have given.

Mr. Wilson: There is the case where premises are temporarily destroyed and for a long period no business is carried on.

Sir K. Wood: That will be another matter, I agree.

Mr. Wilson: Will it be looked into?

Sir K. Wood: Certainly.

Sir W. Davison: Will my right hon. Friend look into the whole question and see what can be done?

Sir K. Wood: I think I have given a very fair statement of the position generally. I will examine the whole matter.

Motion and Clause, by leave, withdrawn.

CLAUSE 10 (Relief from duty on liquor licences, and provisions as to justices licences, where business discontinued owing to war circumstances).

The Under-Secretary of State for the Home Department (Mr. Peake): I beg to move in page 5, line 45, at the end, to insert:
(6) For the purposes of this section and of the Sixth Schedule to this Act the destruction of premises or serious damage thereto, though not caused by enemy action or other cause arising from war, shall be deemed in relation to a business carried on therein to be war circumstances if the execution of works necessary to enable the business to be carried on is prevented by war circumstances.
This is a minor Amendment of Clause 10 which, in conjunction with the Sixth Schedule, deals with the temporary suspension of justices' licences where premises have been damaged by enemy action. War circumstances are defined by Sub-section (1), but there is a further case in which the suspension of a justices' licence may be desirable or necessary, and that is where, although the damage is not due to enemy action, yet rebuilding is impracticable, owing to war-time restrictions. The object of the new Subsection to bring within the definition of "war damage," those cases in which the execution of the work is prevented by circumstances arising out of the war.

Amendment agreed to.

CLAUSE 19.—(Provision as to, orders for relief from Purchase Tax of utility goods.)

The Financial Secretary to the Treasury (Captain Crookshank): I beg to move, in page 10, line 25, to leave out "Limitation of Supplies (Cloth and Apparel) Order, 1941," and to insert "Apparel and Textiles Order, 1942."

This Amendment and the following Amendments represent not very much more than super-drafting, in this sense, that the words now in the Bill are no

longer apt. This deals with the question of relief from Purchase Tax of utility goods. There is a reference in the Clause and in the Schedule to the Limitation of Supplies (Cloth and Apparel) Order, 1941. That Order has been revoked and the Apparel and Textiles Order, 1942, has now come into force. It is under that Order that we have to act for identification purposes. At an earlier stage we put in the date of the Budget because we were not quite sure what the date of relief would be. Now that this Order is the one under which we act, which came into force on 1st June, it appears to me that that must be the right date to insert.

Amendment agreed to. Further Amendments made:

In page 10, line 26, leave out "which may be."

In line 30, leave out:
Sixth Schedule to the Limitation of Supplies (Cloth and Apparel) Order, 1941,

and insert:
Third Schedule to the Apparel and Textiles Order, 1942.

Leave out line 33, and insert:
on the first day of June, nineteen hundred and forty-two, being the" date of the coming into operation of the said Order."—[Captain Crookshank.]

SIXTH SCHEDULE.—(Provisions as to justices' licences, and certificates under the Licensing (Scotland) Acts, 1903 to 1924, in suspense by reason of war circumstances.)

Amendment made: In page 36, line 25, at the end, insert "or taken possession of."—[Captain Crookshank.]

SEVENTH SCHEDULE.—(Purchase Tax. Goods chargeable at the higher rate.)

Captain Crookshank: I beg to move, in page 37, line 27, at the end, to insert:
but not including articles made wholly or partly of rough-tanned, undyed sheep or lamb skin with wool attached, and designed specially for industrial use.
This Amendment and the next have real substance in them. This Schedule gives a list of articles chargeable at the higher rate, and one would naturally have assumed that apparel made of fur or lined with fur, including any skin with hair or wool attached, was in the luxury class. Since the Bill was introduced it has been


brought to my right hon. Friend's attention that there are certain types of industrial gloves made of rough sheep skin which would be caught under this unless we exempted them. I understand that they are especially designed for certain purposes, both agricultural and industrial. They could not be counted as luxuries. Secondly, there is a certain type of industrial wear, both head-gear and footwear made of sheep skin or lamb skin fleece, which will be given exemption under these Amendments. They are clothing, apparently designed for workers in refrigerating chambers. Everyone would wish them to be exempted and not to be counted as luxuries.

Amendment agreed to.

Captain Crookshank: I beg to move, in page 37, line 31, at the end, to insert:
but not including headgear or gloves made wholly or partly of rough-tanned, undyed sheep or lamb skin with wool attached, and designed specially for industrial use.

Sir Granville Gibson: While I think these words are very necessary, because enormous quantities of gloves are used for industrial purposes, in the main they are not made from sheepskin. I wish it had been possible to include some other words which would have embraced industrial gloves made from rough-tanned leathers other than skeepskin or in addition to sheepskin. Industrial gloves made from sheepskin have only a low tensile strength and there are enormous quantities of industrial gloves made from leathers other than sheepskins which have a much greater tensile strength.

Captain Crookshank: Are they with wool attached? I am not sure that I take my hon. Friend's point because the definition is of "rough-tanned, undyed sheep or lamb skin with wool attached." I do not take it from what he says that the gloves he mentions have anything corresponding to wool attached to them.

Sir G. Gibson: No, but there are large quantities of industrial gloves without wool attached which are used for the same purpose.

Captain Crookshank: They do not come in under this definition one way or the other.

Mr. Pethick-Lawrence: I do not think the hon. Gentleman understands the position. The increased duty is being placed on certain kinds of gloves, but the gloves to which he refers are not in that category. Therefore, this Finance Bill does not increase the duty on them. All that the Amendment does is to exclude some of those that are now included in the Bill so that they shall not suffer any penalty. The gloves to which the hon. Gentleman refers are not in the Bill and it was never suggested that they should pay the extra duty. Therefore, his point is already met without further Amendment.

Amendment agreed to.

Motion made, and Question proposed, "That the Bill be now read the Third time."

Mr. Pethick-Lawrence: Is not the Financial Secretary going to say anything?

Captain Crookshank: As there have been so many complaints from time to time that too much of the time of the House is occupied from this Bench, it was proposed that on this occasion I should merely nod to indicate that I moved the Third Reading and that my right hon. Friend would make any observations required at the end of the Debate.

Mr. Benson: It is a pity that the Chancellor is not here. The Third Reading of the Finance Bill is the Third Reading of a rather important Bill, and the Chancellor ought to be present so that any comments that there may be should be made in his hearing. I have not much criticism to offer either of the Chancellor or of the Bill. On the contrary, I think that the way in which the right hon. Gentleman has handled the finances in the past two years is a matter for which he should receive congratulations. He has been very courageous. The imposition of very high taxation such as he has introduced in the past two years requires a certain amount of courage, even though the House has backed him up well. Now that the Chancellor has arrived I would like to repeat my congratulations. He does not often get congratulations from me and I say behind his back things that I would never dream of saying to his face.
There is one point, however, at which his courage seems to have broken down. It was when he found himself face to face with the clerks to the Income Tax Commissioners. No Chancellor has been more ruthless in facing vested interests than the present Chancellor. Excess Profits Tax at 100 per cent. and the enormous taxation which he has imposed upon incomes and on beer and tobacco, two substances very dear to the public of this country, show the courageous way in which he has tackled his problems. When, however, he is face to face with a tiny body of individuals, who are really very insignificant, whose functions are purely historical and very obstructive to the machinery of Income Tax, he says that his proposals are all he could achieve by agreement. Why should he agree to small obstructive vested interests in war-time?

Mr. Deputy-Speaker (Sir Dennis Herbert): I would remind the hon. Member that this subject is not dealt with in the Finance Bill.

Mr. Benson: If you will turn to the Tenth Schedule, Mr. Deputy-Speaker, you will find the result of the agreement between the Chancellor and the clerks to the Commissioners dealing with the Income Tax machinery. The whole of that Schedule, as the Chancellor said on the Committee stage, is the outcome of an arrangement between the General Commissioners of Income Tax and himself.

Mr. Deputy-Speaker: That seems to me too weak a peg on which to hang the rather heavy attack in which I imagine the hon. Gentleman was about to indulge. If he confined himself to the agreement it would be another matter.

Mr. Benson: I was going to point out that the agreement is inadequate and that it is a point on which the Chancellor's courage has broken down very badly. I do not propose to reopen the whole subject for I said my say on the Committee stage, but I want to temper the congratulations I have given to the Chancellor on his handling of our finances with the statement that I am grievously disappointed with him on this small point.

Mr. Pethick-Lawrence: I should like to join my hon. Friend in congratulating the Chancellor not only on the Bill but on his handling of the various stages of the

Bill in the House. I do not think it is necessary at this stage to make any further general remarks. We are getting accustomed to large figures. I see that in the United States they reckon that their annual bill may run into what is equivalent to £10,000,000,000. Therefore, we are not very far short of half the figures for the United States. Considering that our population is well under half theirs, and that our general wealth is less, I think we are facing the burden with great courage and perseverance. There is one question I would like to ask the Chancellor. Under this Bill he is imposing upon manual workers the same Income Tax as last year, but he has told us of certain alleviations he proposes to make in the collection of that form of revenue this year, and I should like to ask him whether he is in any way extending those alleviations beyond what has already been announced. With that, I take my farewell of this Bill, of which I do not think anybody is particularly enamoured but which we all accept as part of the price that must be paid to ensure the liberties of this country.

Mr. Graham White: Whatever may or may not have been said about this Bill in the course of its passage through the House, we are all agreed in expressing our good will and thanks to the Chancellor of the Exchequer for the way in which he has piloted through what is, after all, an extraordinary Measure. I imagine, too, that he would express his thanks to all sections of the community for the way in which they have stood up to, or at least not been borne down by, the extraordinary range of exactions which he has been obliged to place upon them. When we consider the nature of those burdens I think it is remarkable that they have been borne with so little complaint and so little Parliamentary criticism. We know that an Englishman regards himself as possessing two inalienable rights, one, his liability to Income Tax and, second, his right to grumble about it. Having regard to the large number of people mulcted, the Englishman has accepted the Income Tax in a remarkable way, and in view of the very real difficulties which were disclosed in the working arrangements the small volume of criticism has been remarkable and a matter for which we ought to express our thanks. I think the Chancellor has said that he would make a very


careful review of the administration of the Income Tax in the case of weekly wage-earners to see whether, as time goes on, some better and easier method may not be evolved, and I trust that he will give that matter his attention. The concessions embodied in the Bill with regard to the taxation of the earnings of wives have been much appreciated and have facilitated the collection of the tax and the smooth working of our finances.
If these unparalleled financial burdens have been borne by the country so cheerfully—they are, none the less, felt to be no small burden in multitudes of cases—it is because the country feels that in general the outlay of our Budget is just in that it imposes heavy taxation upon luxuries and provides subsidies for some of the essential articles of food and has kept inflation away from the centre of our economic system. It is true that there may be inflation on the fringes, but as long as it is kept there it will not do any serious amount of harm. Further, I think the country approves the decision to maintain the Excess Profits Tax at its present rate, although with some feeling that there are some injustices which remain, but I do not know that the country has fully realised just how far war profits have been controlled and the fact that in general no war profits are being made by industry. In truth, large sections of industry are making less by way of profit than before the war. As an example of that I may mention the iron and steel trades.
That makes me a little doubtful whether some of the Chancellor's more optimistic forecasts of revenue may be realised. I think it is a habit of his Department to under-estimate rather than to overestimate, and I hope they have not departed from that habit, because without any question industry is coming to have less taxable profits than before the war, and, of course, equity capitalists have not benefited in the course of this war. The country wished that to be so and it has been accomplished. In 1938, with Income Tax at 5s. 6d. in the pound, if my memory serves me correctly, the amount distributed in dividends to equity shareholders was some £38,000,000. In 1940 that sum had fallen to £21,000,000, and I shall expect it to fall further. That fact does not seem to be fully appreciated throughout the country, and I think it as well that it should be.
There is one other matter on which it would not be out of place for me to say a word or two, although it has been mentioned before, now that we are taking leave of the Finance Bill. I refer to the simplifications which we have been able to make in our national finances as a result of the very great aid we have received from Canada and the United States of America. The wise and I would say far-seeing combination of ideas and sound regard for our future relations which have prompted this generous treatment is not always realised. It is not merely the case that it has made our finances simpler and easier, but it does show a new spirit of co-operation in the financial sphere which I have no doubt will remain when the war is over and will make the prospects of the peaceful development of the world very much greater than would have been the case if no such foundations had been laid. I notice with very great satisfaction that this new financial spirit of co-operation is being extended by the inclusion of other countries in the Lend-Lease arrangements. If we had fought this war with a disregard of future finances, I think the problems of peace might very well be such that we might have felt that it was impossible to face them, but wisdom and generosity, the spirit of the good neighbour and the co-operative family spirit, have been displayed at a very high level of sagacity by the United States, by Canada and I think by ourselves. I trust that not only between those countries but between them and others as well there will be a new standard of financial cooperation after the war. It has been made possible by those who first took the initiative in these international relations.
I think we have cause for satisfaction, in so far as there is satisfaction to be obtained from the Finance Bill and the Budget. I do not think that anybody who had been asked what our finances would be like after three years of war on this scale and at this cost, would have believed it possible that our financial transactions would be proceeding so smoothly and on a basis which did not impair the possibility of their being soundly conducted in future. For the rest, we must proceed on the lines that have been laid down. The policy is still to be one of self-denial in regard to every article of consumption. The Chancellor of the Exchequer is in the position of saying, "Heads I win, tails I win also," and


having succeeded in producing his revenue by taxes and curtailing consumption, he has performed a useful service to the country. I think we can again thank the Chancellor of the Exchequer for the way in which he has conducted our finances during the past year.

Sir Peter Bennett: It is not my intention to pursue the general topic of the Finance Bill on this Third Reading, but to hark back to points which have previously arisen and on which some light has been thrown since. It will be remembered that on the Second Reading I was one of those who urged the Chancellor to give consideration to the suggestion that the funds of trade associations dealing with export matters should be exempt from the operation of tax. The hon. Member for Northampton (Mr. Summers) put forward an Amendment which the Chancellor, in very polite and charming tones, turned down, as I expected he would. We understand his reason, which was that he could not agree to free any reserves whatever from taxation because, if he, did so, he would open the door too widely. Others would take advantage who might not have the claim that we feel we have in this particular matter. My hon. Friend the Member for Pudsey and Otley (Sir Granville Gibson) made a statement then which surprised us to a certain extent and which surprised the Chancellor also. He told us that there were ways and means of doing that and that it has been arranged by other trade associations. It was news to us. Since then we have gone into the question, and we find that, as one would expect, my hon. Friend was stating facts, and those facts, apparently were unknown to the Chancellor. As apparently such arrangements have already been made, I would like to ask the Chancellor whether some way cannot be found of achieving our object of helping export trade funds. I would like him to give consideration to any proposals which may be put forward, by which these funds could be earmarked—paid over completely to an outside organisation—and then used for the purpose of assisting our export trade when the time comes.

Mr. Deputy-Speaker (Colonel Clifton Brown): I am afraid I cannot allow the hon. Member to pursue that matter further. I cannot find it in the Finance Bill.

Sir P. Bennett: I bow to your Ruling, Mr. Deputy-Speaker, and I will say no more about it. The other point I raised, which certainly is in the Finance Bill, was the question of the taxation of weekly wage-earners. I made certain statements with regard to inquiries I had made and afterwards some of the hon. Gentlemen who as a rule sit near me came to me and asked whether I knew what was being said in Glasgow. I had to admit that I did not, and on this occasion I shall make it clear that I am not transgressing by saying what Scotsmen would wish to say, but am speaking purely as an Englishman and of the industry in England with which I come into contact. Since that date I have made some further inquiries, and I find that the statements I made then have been borne out in the time that has elapsed. The concessions which the Chancellor has made are appreciated, and the agitation against the deduction of tax is dying down. I do not say that people like it; I do not think anybody ever likes paying Income Tax, and I am quite certain that the weekly wage-earner who has never been used to it, has not got used to this new habit yet. But I have made a considerable number of inquiries, and I find that the statements I previously made are borne out by the facts. There are cases of hardship and other special cases, but these all seem to be due to some delay and to the fact that the period during which deductions are made is short. I hope now that the collection of the tax has settled down, the special cases will be dealt with and that delay will not occur in the future, because I believe that if we can keep it up to date, the weekly wage-earner will, in view of the concessions which the Chancellor has made, as time goes on become more or less resigned.
I am still receiving a certain number of new schemes, and I hope that the promise which the Chancellor made that he would examine these new schemes and would work with the T.U.C. and the Employers' Federation to look for a more ideal scheme still stands, because I am passing them on to him. I am receiving a certain number of letters from people who are rather annoyed and who cannot understand why their pet scheme has not been adopted. I feel sure that if an ideal scheme does come out, the Chancellor will be just as pleased as the rest of us. In this connection I was a little disturbed to hear from one of the


Revenue staff associations, who seemed concerned that their pet schemes were not being considered by the Chancellor. I am very fond of the Revenue authorities for a reason which perhaps is not usually appreciated. I find that they are very helpful if you are in trouble or difficulty. My mind goes back to a period in the last war when we had the Excess Profits Duty and did not quite understand it. I was told then by an Income Tax inspector that his duty was to see that I was fairly treated; not only to see that he got from me all that the Revenue was entitled to, but also that I did not pay a penny too much.
I found that that was the attitude adopted whenever I or my people went to them with problems. I was, therefore, a little concerned to find that they were coming forward with some schemes of their own and, when they did not get them adopted, they were publishing the fact in the Press and by circular. I believe the Chancellor will find some ways and means by which this can be made unnecessary in the future. The Inland Revenue authorities, like the rest of the Civil Service, should be an organisation which impartially serves the State and which does not have to come into the arena and take sides. This House can do all that is necessary in that respect. I am not criticising what was said, but it seems to me that there might be possible danger if that sort of thing grew in the future.
There is one other suggestion that I want to put to the Chancellor. I hope he will hurry up with the certificates. I have been inquiring into this matter and I find that wage-earners are still a little dubious as to what they are to get on account of the post-war credit. I should have liked to see them have a card on which they could put their stamps week by week and watch the total mount up, but if that is administratively impossible, I hope the Chancellor will hurry up and get the promised certificates into their hands at the earliest possible moment. I am told everywhere that this would have a great psychological effect upon the minds of the wage-earners who are paying Income Tax for the first time. We are all human, and when we get indefinite promises we do not know what to make of them. It is very much like a man

promising to remember me in his will. I should, no doubt, be properly elated at that, but I should not know what it was going to amount to or when it would come. On the other hand, if he told me that every year he would put a certain sum into my bank account, I should be able to see it mounting up and should feel much better about it. Instead of a pious hope, I should have a little nest-egg. I want to see the men handling these certificates and feeling that they are getting a definite nest-egg put away. It would remove much of the irritation which is undoubtedly caused by their having to pay Income Tax.

Sir George Schuster: It seems common form to start speeches in this Debate by offering congratulations to my right hon. Friend. I certainly join with those who have spoken to the extent of congratulating him on the reception which he has had and the way in which he has got his Measure through the House. He knows that I differ from him on certain points on which I will venture to say a few words to-day. We are now at the stage when the curtain is rung down on one of the acts in our annual drama, and perhaps it is legitimate to make two observations on the general nature of our discussions. I will only mention them, since to discuss them would be out of order, but I would ask my right hon. Friend to bear them in mind when he introduces the next annual financial programme—and I feel sure that it is he who will do that—next year. The first point is that we never have an opportunity in this House to discuss national expenditure as a whole. The House ought to discuss that and I am sure the House wants to. The second point is that we never get an opportunity to discuss general economic policy. My right hon. Friend is entitled in his Budget speech to make references to what he is doing, for example, to avoid the danger of inflation, but we, as Members of this House, do not get an opportunity to discuss the general programme which is being followed by the country to win the fight against inflation. We certainly shall not succeed in that fight unless all our measures are concerted together or unless they are complete and comprehensive. I hope that my right hon. Friend will assert himself as head of the Treasury and will ensure that the Treasury takes a live and leading role in both those matters. I am, indeed, not satisfied that the


Treasury is exercising that supra-Departmental authority which it ought to exercise to see that we are getting real value for our money, nor am I satisfied that the Treasury is able to carry out a comprehensive and complete policy to resist the danger of immoderate inflation. As regards expenditure and seeing that we get value for our money—

Mr. Deputy-Speaker: Perhaps the hon. Member had better bring his argument back to the Finance Bill.

Sir G. Schuster: I beg your pardon, Mr. Deputy-Speaker. Perhaps I have said enough. I hope that my right hon. Friend will bear in mind what I have said and will give us a full review of national expenditure as a whole, showing where the money is going, when he presents his White Paper next year.
I want now to turn to matters which are directly concerned with the Finance Bill. I agree with all those who have said that we must take without complaint, and even with pleasure, the maximum possible burden of taxation. On the other hand, I feel, as my right hon. Friend knows, that there are certain aspects of his present scheme of taxation which are objectionable on two grounds. The first is that the way in which excess profits are now calculated for the purpose of attracting tax is liable to do very great injustice as between one class of taxpayer and another. My second point is that the way in which liability to Income Tax is at present assessed may do grave harm to the financial structure of business in this country and may be leading to unsound practices. When taxation reaches the levels which it has now reached, all these problems take on a new significance. It is the duty of my right hon. Friend, as guardian of the national financial interest, to have these matters inquired into. I may be wrong in this matter, but I have a strong impression from all that I see and hear, that the combination of Excess Profits Tax at 100 per cent. with the present very high rate of Income Tax is likely to be doing harm to the industrial structure in which we are all interested, and may be setting up reactions of an undesirable nature. These matters ought to be inquired into.
I would again urge my right hon. Friend, as I have urged on him several times before, for a considerable period,

that he should appoint a small expert committee to inquire into these matters. I believe he has some fears that this is politically a dangerous subject to handle. I do not believe he is right about that. Everyone wants to see war profits eliminated, but I do not believe that Members on the Benches opposite want to see injustices done or practices started which will undermine the financial soundness of British industry. Therefore I should be willing, if I had to appoint the committee, to take all its Members from the Benches opposite. I believe that those Members would look into the matter fairly. I will be a little more specific than I have been hitherto. I should like to see a very small committee. I would like my right hon. Friend to appoint, as chairman of the committee, somebody like Mr. Justice Uthwatt—who has already done very valuable work for him in other fields. The chairman might be aided by two members, one to represent the Labour Party point of view, and one with a knowledge of industry, and perhaps two expert accountants as assessors. The questions which ought to be put to such a committee are something like the following—

Mr. Deputy-Speaker: The composition of a committee of this sort cannot be gone into on the Third Reading of the Finance Bill.

Sir G. Schuster: Is it not legitimate for me to indicate the points into which I believe inquiry to be necessary?

Mr. Deputy-Speaker: No. That subject is quite outside the Finance Bill. The hon. Member is limited to discussing what is in the Finance Bill.

Sir G. Schuster: I bow to your Ruling, Mr. Deputy-Speaker. All I wanted to make clear was that we in this House should discuss these matters with full knowledge of what is happening as a result of the present taxation, its effects on the finance of industry, the reactions which it may be setting up in business practices, in methods of tax evasion, undesirable practices of extravagance, and so on. These are the sort of points into which I think an expert inquiry is extremely desirable and extremely important in the national interest.
Finally, I would appeal to my right hon. Friend not to take the view that whatever is happening now is not of much


account because it is temporary and only likely to continue for the duration of the war. I am quite convinced that we are embarked on a period when taxation of industry will be necessary on a scale such as we have never known before, not merely for the duration of the war but for the period which follows. The nation will insist that a large proportion of the national income is to be devoted to public purposes, and that will mean very heavy taxation for as long a time as we can foresee. I would not resist that or regret it, but it does mean that it is extremely important that taxation should be levied on a basis completely fair between one class of taxpayer and another, and assessed in a way which does not tend to the definite encouragement of unsound business practices. I hope that my right hon. Friend will give his attention to these matters in the months which will elapse between now and when he begins to consider his financial measures for 1943.

Professor Savory: What I feel with regard to this Budget is that very many important concessions are being made that could be avoided. On Thursday last I obtained from the Chancellor of the Exchequer an answer that, in view of the omission to tax the lowest priced seats in cinemas and elsewhere, the Exchequer would be losing £750,000 a year. Yet when the tax on other seats is being doubled, he has refused to increase the tax on these lowest priced seats. I have been a frequenter of the sixpenny seats all my life. [Interruption.]Oh, yes, I like to see the people around me enjoying themselves. I am sure that all with me in those seats would have been delighted to pay an extra halfpenny or three farthings to the Chancellor of the Exchequer, and it seems to me an extraordinary thing that if people are willing, for their own pleasure, to go to these picture houses, from which they could refrain if they liked, they should not pay their share of taxation.
A further concession which has given me the greatest cause for reflection and anxiety is the proposal of the Chancellor of the Exchequer to raise the limit of exemption of married women earning wages from £45 to £80 in connection with Income Tax at a cost of £25,000,000. What I am afraid of is that you are thereby setting up a privileged class. We

have so often heard from our friends beside me of the necessity for equality of sacrifice. You are creating here a vested interest. May I call attention to the very valuable White Paper which in this connection the Chancellor has issued. He points out in Table 2 that in the case of a married couple, where the husband is earning £150 and the wife is earning £100, at present they are paying £13. Now he proposes that henceforward they shall only pay £1 12s. 6d. Take a second case, that of a husband earning £175 and the wife £100. At present they are paying £20 6s. 3d., and the Chancellor proposes that in future they should only pay £8 19s. 9d. I have listened to the speeches made on this subject, and I must confess that I have not heard any expressions of gratitude for these most costly and extravagant concessions. On the contrary, I have observed that they are simply being used as a spring-board to extort still further concessions from the Chancellor of the Exchequer.
If we consider what we were told last Sunday after the 6 p.m. B.B.C. news, that the total of voluntary subscriptions made to the Chancellor of the Exchequer, plus loans without interest, amounts to less than £20,000,000, which is, of course, an immense sum, does it not seem an extraordinary thing that by this single concession the Chancellor should be throwing away an additional £5,000,000 by giving up a revenue of as much as £25,000,000? Look at it from another point of view. Northern Ireland is contributing at the present moment more than half her total revenue towards the war, that is to say a sum of £21,000,000. She is making this heavy sacrifice, and yet that sum of £21,000,000 is exceeded by £4,000,000 by the concession which the Chancellor of the Exchequer is now making. May I call attention to this: When under the Act of 1920 the contributions of Northern and Southern Ireland were fixed, Northern Ireland was called upon to pay £8,000,000, and Southern Ireland £10,000,000, a total of £18,000,000. Now Northern Ireland alone is contributing the immense sum, for a small country of 1,200,000 inhabitants, of £21,000,000. Surely it is discouraging to find that by setting up this vested interest the Chancellor is sacrificing more than this vast sum by making a concession costing £25,000,000. Many of us, I am sure in fact all the Members of this


House, have been doing our utmost to forward the scheme of war savings weeks. It was a great joy to me to hear in the broadcast on Sunday of those towns in Northern Ireland like Ballymena and others contributing such generous sums. But speaking at those meetings I should have an easier conscience, I should feel that I could do it with greater enthusiasm, were I convinced that the Chancellor of the Exchequer had not so lightly made such an unnecessary concession as this £25,000,000.
I cannot help feeling that the Chancellor of the Exchequer himself profoundly regrets the concessions to which he has been forced. I believe that in his heart of hearts he must deeply deplore having to sacrifice this stupendous sum of £25,000,000, and I venture to express the hope that posterity will not attribute to the Chancellor of the Exchequer the melancholy confession of the great poet Ovid when he said—

… video meliora, proboque; Deteriora sequor.

Dr. Russell Thomas: The discussions at this stage of the Bill have made clearer than ever before that it is production and its proper allocation as between the war effort and the vital needs of the people which is the real problem we have to face, and that finance itself takes a secondary place. The Chancellor is chiefly concerned, by means of the taxes embodied in this Bill, and the powers given to him in this Bill to borrow money from the citizens, to remove from their personal use the redundant purchasing power which might otherwise be utilised to create an undue demand for the limited goods available. That, I think, is the basis on which the Chancellor has worked. Control of prices and rationing will help him but one cannot urge strongly enough that control should be as universal as possible. An attempt to limit spending power—or, at least, to prevent further increase of consumption—and at the same time to obtain a greater return to the Treasury, is seen in the increase in the Tobacco, Wine, and Spirit Duties. The realisation that goods, and not wages, are the real things that matter is daily becoming more prevalent among our people, especially in the case of women. This Bill actually emphasises that point. The housewife is becoming probably more conscious than ever before

that it is not the weekly sum which her husband brings home that matters, but the amount of essential goods that she can purchase. She will haggle to the last halfpenny in the market place in order to meet her essential needs.
The Chancellor has had two main problems to consider. First, he has had to say how much taxation he must apply to the present taxpayer, and how much he has it in mind to extract by borrowing from the citizen, with the accompanying problem of how much taxation he must leave to the future taxpayer. That is the first problem. The second problem which is embodied in this Bill is one which I would like to make the basis of my few remarks. The Chancellor has had to see that the withdrawal of purchasing power does not react unjustly on any one part of the community, or leave it unable to get a fair share of the limited quantity of goods available or to meet its essential commitments. These two problems bristle with difficulties. The Chancellor, for better or worse, has elected to meet them on the lines embodied in the present Bill. He has an unenviable task. I have always, secretly, had deep sympathy for him, in spite of my occasional, but, I hope, friendly, demonstrations. I have never been one of those who have showered congratulations upon him, but I shall add my tribute in this way. One thing is certain: in spite of all criticisms, the right hon. Gentleman has so far enabled us to proceed without that catastrophic inflation which might have been a death knell to our war effort, or, at any rate, made the annihilation of the evil beasts which stalk through Europe and the Far East doubly difficult. I believe that, with this Bill, he will still maintain our nation on an even keel.
May I return to the two problems with which I think the Bill is concerned? I leave the more contentious one of borrowing. We shall have plenty of opportunities, no doubt, to discuss that in the course of the year. I would like to turn to the second problem, that of the equitable distribution of the burden. I would like to call attention to that part of the Bill which allows an assessment to be made on the current year if the proceeds of a trade or profession have dropped by 20 per cent. on the preceding year, on account of the war. I do not think that this Clause is as just and equitable as it appears to be. But there are many people,


professional people and business people, who have not had such a drop in one year, but who during the first year of the war, on account of evacuation or of enemy attack, have seen the areas in which they worked become depopulated, and whose proceeds have dropped in the first year by perhaps 18 per cent., in the second year by another 18 per cent., and in the third year by say 15 per cent. That is to say, their income since the war began has dropped by over 50 per cent. Yet they are unable to have their assessments made on the current year. The result is that many of these comparatively small people, to whom we owe so much, have had their assessments made up from April of this year and have to pay next year on incomes at least, perhaps, one-third less than those on which they are assessed. That means that they are assessed at not 10s., but 13s. or 14s. in the £. It is useless to say that as the years go by they may have the benefit of a low assessment. They may not be in this world to receive it.

Mr. George Griffiths: They may get it in the next world.

Dr. Thomas: It is wrong to joke about this matter. For those people this is a very serious and tragic affair. When there is suffering in another class of the community, the hon. Member is the first to talk about it and advocate a remedy. I would like also to refer to the small rentier, who will suffer under the present Bill, and who has suffered since the war began. Take the person with an income, perhaps out of a small investment, of, say, £200 a year, who is aged 60, and who has worked hard all of his or her life. Perhaps if a woman, she is unmarried, and has no one to look to for help. That person is hit very hard. They belong to one of the most loyal classes in this country. Here is a letter from a very intelligent woman. I will read some of it, because I think it is important:
Will you take up another and more vital theme, the case of women, and men too for that matter, of over 60 who cannot earn and whose fixed incomes up to £200 are so cut down by taxation that they have in many cases fallen below a living possibility. This is really a very serious matter. It affects in the main women of the educated classes, all of them accustomed to a standard of living above that of the labouring class.
I say, quite openly, that I agree with that. If you have had a standard of living

for over 60 years and you are suddenly called upon to alter it it is a very serious thing. Let me read on:
This is not their fault and they should not be penalised for it in their old age. They seem to be put aside from reasonable and sympathetic consideration. This is unjust, and it is absolutely begging the question to make assertions in reply to Members, suggesting the 'patriotism' of these unfortunates is concerned or that they would be far worse off in some other country. We are not in other countries but are only concerned with facts. The rise in the cost of living has to be reckoned with and the fate of these people is tragic. For years my Income Tax rebate was £50 annually. Last April it was £3 18s. 6d. ! I own a small house, which I have been compelled to let, in order to exist at all. I cannot get the most modest accommodation under £3 a week and I still have to pay high rates on my house and compulsory War Damage Contribution, insurances and do repairs. I have absolutely nothing for doctor, dentist, essential repairs or renewals of clothing. Until the war I earned something by freelance journalism, a source of income washed out by the curtailment of the papers. There are a great many in the same predicament, for whom life holds so little now, elderly people who have lost their security and are frightened.
I do not want to hurt the Chancellor by reading the whole of the letter, but she adds:
The country's need would not really be affected if the free allowance was restored.
I am afraid, Mr. Speaker, you would object on the Third Reading of this Bill to this being put forward as a proposal, but, nevertheless, if the Chancellor of the Exchequer should bear in mind in the coming year the restoration of the free allowance to £100 instead of £80 to those of limited incomes, such a concession would be a mere flea-bite in the cost of the war. This letter asks Members of Parliament to help people in the position I have indicated. I am sorry to have had to read that letter at such length to the House, but it relates to, and seriously affects, a special class. The Chancellor of the Exchequer has given concessions in many other directions. He has given a concession to married women, and perhaps he will clarify the position and say whether married women will get relief only if engaged in industry? I ask him if he will make a note of that. Does it apply to women who are professionally engaged? He has given relief to all sorts of classes, to the wage-earners, and in regard to E.P.T. at the end of the war and so on, and I suggest that he should now look into these matters in regard to this class of persons whose income has


dropped and who are paying heavy taxation. He should bear in mind another point. Even people who qualify for a current assessment are often asked for their full instalment of tax in January. I know that this is a matter of administration, but he might very well inquire into it. Very frequently in January they have difficulties in doing so, and they are very hard put to it to meet the whole of the tax at that time although they may even get a repayment in July.
I would appeal to the Chancellor of the Exchequer, on the Third Reading of this Bill, which will so soon become the law of this land, to remember, in his administration of the Act, these two classes of people who strong in character and self-respect are weak in their representation in this House; who have, on the one hand, no great combination to represent them, and on the other, no great industrial and financial interests. These are classes of the community who in sturdiness and intelligence have contributed much to make our country great, and who, with self-denial and sacrifice, have given their sons freely for the ruling and building of this great Empire; helping those at home to grow rich, and thereby enabling others to obtain work. I ask the Chancellor, who, I believe, probably feels at heart much as I do, to give instructions to his officers throughout the length and breadth of this land, to his collectors and inspectors everywhere, that in these cases after proper and kindly investigation, not to allow their bailiffs—those men who by long usage of their employment have, perhaps, lost that delicacy of feeling which ameliorates man's intentions, and softens his actions—to be too eager to distrain on the meagre goods of these helpless people, thereby crushing in their hearts the gentle and noble sentiments which not even victory itself will revive. The question is not one entirely of figures—that I think is clear. It is one of arranging our affairs as a nation, as justly and as evenly as possible, and then marching together until a new dawn heralds the bright sunshine which will once again lighten and gladden this dark and dreary world.

Mr. George Griffiths: I do not propose to follow the line taken by the hon. Member for Southampton (Dr. Russell Thomas), but to make an appeal

to the Chancellor of the Exchequer on one special point. It is a question which is without doubt seriously affecting production in the country. I want the Chancellor of the Exchequer to give his attention to the stopping of taxation from the weekly wages of the workers in industry. I have been among my own people this week-end, and, to use a Yorkshire phrase, they are "very naughty" over this job. I have the case of the widow of a man who had been ill for years and was under the public assistance committee. She has four or five married sons and one son at home who had been off work for 10 weeks following an operation. After his return from a convalescent home he started work on the Wednesday morning, which was the beginning of the shift. There has been plenty of talk about absenteeism, and this man was given a chance of working overtime. He works on the surface. He put in 8½ shifts, and he and his mother were expecting a decent bit of money at the week-end. His mother had Had nothing from him for 10 weeks, only a bit of "Lloyd George." [Interruption.]That is what we call it. You call it State insurance benefit, but it has always had that name since its birth. That son was glad that he was going to be able to bring home some wages to his mother at the week-end. When he drew his money on Friday afternoon he found that £2 5s. had been stopped for Income Tax, and he had not had any wages for over 10 weeks. He said to me, "George, I felt that I could have eaten my pay-note." That is how he felt. He had only £1 15s. 6d. to take home, and he said to his mother and to me, "Look here, I am not going to work any more overtime if this is what they are doing with me."
I want the Chancellor of the Exchequer to see whether he cannot somehow or other prevent this kind of thing. He has promised that a single man shall not be taxed until he has received £2 in wages, a married man £3, a married man with one child £4, and a married man with two children or more, £5. He announced those concessions across the Floor of this House. When I go into my division they say, "Look at this pay-note," and they want to know whether I have been telling them the truth about Income Tax. I am almost afraid to tell them of anything that happens in this place, because it is not true. I ask the Chancellor of the Exchequer and the Financial Secretary to go


into this question and to see to it that a man who has been off work sick for a fortnight or three weeks shall not be subject to the biggest percentage of what is stopped for Income Tax being deducted from his first week's wages.
I handed a note across the Floor on 23rd or 24th March concerning my brother, who, in one week, had 55s. stopped from his wages. When I went to visit him one week-end he was ready to throw me out of the door. He said, "What do you think about this lot?" On top of this he later received a pamphlet asking him to invest something in War Savings. It is all right for the Chancellor to laugh, but these people do not laugh. They feel it on the raw so much that they do not care a tinker's curse whether they produce coal or not. [An HON. MEMBER: "Shame.".]The shame does not lie on the man; it is on the system.
I want things to work as smoothly as possible so that our fellows can pull their weight. Everybody knows you cannot win a war without coal. Your ships, tanks, aeroplanes, T.N.T., petrol and other things are dependent on coal, and I want our men to be able to hold up their heads when we have won this war and say, "We threw our whole weight into it." The other day I was talking to a big industrial employer who was going to Sheffield and who said, "The Treasury should let employers deal with this question, because they know the personnel." I hope the Chancellor will think out some method whereby men will not be stopped 50s. or £2 5s. a week from their wages. I plead with him that this sort of thing should not be carried on any longer.

Sir John Mellor: I would like to refer to Clause 23 of the Bill in a rather different sense from that of my hon. Friend the Member for the Queen's University of Belfast (Professor Savory). This Clause increases the special allowance in respect of the earned income of married women which originally was provided by the Finance Act, 1920. That special allowance was superimposed upon the general allowance in respect of the earned income of married couples. I have no objection to this provision. I think it is a perfectly reasonable encouragement to married women to enter industry and especially to those married women who, by their absence from their own homes,

have to pay for domestic help. I would like to observe, in passing, that there is strong evidence that the married women who are volunteering to go into industry have been far more moved by the incentive of patriotism than by the incentive of personal gain. I was told recently by an official of the Ministry of Labour in the Midlands that these volunteer women, when interviewed, very rarely made any inquiry as to what wages they would receive. That, I submit, is very refreshing evidence of their high public spirit.
I recognise it is a well accepted principle that earned incomes should be treated more favourably than unearned incomes for purposes of taxation, but I suggest that it would be a great misfortune if that discrimination were allowed to convey the impression that there is some stigma upon unearned income or that in future unearned income may not expect fair treatment. I say that, especially, because the financial appeal, as distinct from the patriotic appeal, of the National Savings Campaign depends upon the expectation of receiving what, for Income Tax purposes, will be unearned income. A yield of 3 per cent. gross would be a small inducement to investment in Government stocks unless there were ground for confidence that it was the intention of the Chancellor and his colleagues, and those who support them, that in future, so far as they are concerned, lenders shall receive fair treatment. Recently the Chancellor demonstrated his intention of protecting lenders. He took a somewhat unpopular course in refusing to require mortgagees to pay a share of the War Damage Contribution and did that because he wished to uphold the sanctity of contract, and whatever view may be taken of his line on that occasion from a business point of view, at any rate, I feel that his action was one of the kind which will assist the Government to sustain confidence in our finances and will stimulate the National Savings Campaign.
I would like to say a word upon the question of the taxation of annuities, which has recently become all the more important, partly because of the increase in the standard rate of Income Tax and partly because of the increase in the cost of living, which affects a very large number of people who have to live upon


annuities. It is well known that the Revenue authorities make no distinction between the capital aspect and the income aspect of annuities so far as Income Tax is concerned. All business people regard an annuity as being partially income and partially a return of capital, but Income Tax is charged upon the whole annuity. My light hon. Friend has in the past been prepared to make some concessions in regard to wasting assets in relation to taxation. To-day he was unable to make any further concession, but I think he has admitted that in the case of wasting assets some allowance should be made for the element which represents return of capital. Certainly, from a business point of view, an annuity is a wasting asset. It is rather curious that, so far as Income Tax is concerned, the Revenue authorities ignore the element of capital in an annuity. On the other hand, in relation to Estate Duty they look upon the matter from a rather different angle, because when the annuitant dies in certain cases the Estate Duty Office claims that some imaginary amount of capital passes on the death of the annuitant and that Estate Duty accordingly attaches.
I submit that if one contrasts the attitude of the Revenue authorities in cases of Income Tax upon annuities and cases of Estate Duty upon the death of an annuitant, one finds a curious difference. I think it is that kind of thing that gives the impression that the subject in relation to the Revenue authorities is in the position of the customer who is always wrong. The Tenth Schedule of the Bill makes certain simplifications in the machinery of administration, but the Bill does nothing to simplify the statutory provisions with regard to taxation. I suggest that it would be very helpful if we could have, at any rate to a limited extent, some consolidation of the Income Tax and other provisions. If it could only be done as far as the statutory provisions—

Mr. Speaker: The hon. Member is speaking on something that is not in the Bill.

Sir J. Mellor: I referred to the fact in the Tenth Schedule provision is made for the simplification of the machinery of administration, and I was saying that I regretted that some further simplification—

Mr. Speaker: That is exactly what I meant. The hon. Member was referring to something that is not in the Bill. He may not do that on the Third Reading.

Sir J. Mellor: I must express my apology, Sir, and leave the matter there. I conclude by saying that in war and in peace the functions of the Chancellor of the Exchequer and the Treasury are very different. In peace-time probably the Chancellor's most important function is to check any extravagance, to limit the expenditure of Government Departments, and to leave as much spending power as he can in the hands of the public. By contrast, in war-time the position is reversed. It is then the Chancellor's function to drive all the purchasing power he can into the hands of the Government, to see that we get full value for the maximum amount of expenditure, and at the same time, as far as he can, to limit the purchasing power of the public. I think that my right hon. Friend, with the assistance of those Departments which are responsible for supply and rationing, and so on, have done extremely well in checking any inflationary tendencies. I think that if my right hon. Friend can sustain his line of policy, notwithstanding the greater difficulties which will beset him as the war proceeds, we shall emerge from the war with our finances in a sound, even if straitened, condition.

Mr. Brooke: As I conceive it, we Members of Parliament have two duties in connection with the Revenue side of the national accounts—first, to give the Chancellor of the Exchequer all the backing in our power in his most ungrateful and most punishing task of raising £2,400,000,000 a year by way of taxation, and, secondly, to draw his attention as early as may be to those points where the shoe is pinching on certain individuals over-much, pinching to a point at which the pain can no longer be borne. It is not only a case of pinching. It is a case of nails working their way through the sole. We all know how those nails at first begin only to damage our socks, but if we do nothing about them, they go on, sharp against the flesh, until they lame the whole body. I want to suggest that the Chancellor must be extremely careful, now that rates of taxation are raised so high, that action is taken early enough to mitigate those cases


where severe injustice is now taking place as between one class of taxpayers and another.
My hon. Friend the Member for Walsall (Sir G. Schuster) referred to the operation of combined Income Tax and Excess Profits Tax. I hope the Chancellor will give further thought to the proposal for having a review of the effects of Excess Profits Tax carried out by an independent committee. It is a proposal that was backed at an earlier stage of the Budget proceedings by the hon. Member for Chesterfield (Mr. Benson) on the other side of the House. There are serious injustices remaining. The accountancy profession is aware of them. Accountants are men who by the nature of their work have these matters brought to their attention first of all, and although not an accountant myself, I am aware of a widespread feeling among accountants at this time that the Finance Acts are not being amended rapidly enough to remove most genuine injustices which are at present occurring. Sometimes accountants blame this on the obstinacy of my right hon. Friend, but more often they suggest that the House of Commons is not sufficiently alive to its own job in drawing to the attention of the Chancellor these unfairnesses which are happening. I would like to suggest to the Chancellor, therefore, that, not only for long-term purposes, but in order to secure the maximum amount of unified support and good-will for the Revenue here and now, he should take some such step as this to make it quite clear to all concerned with the Excess Profits Tax that he is prepared to submit hardships to an independent tribunal for their judgment and report.
I should be extremely sorry if the House were to think that it is only the payers of Excess Profits Tax for whom I am concerned. My argument applies in the same way to the individual taxpayer. In the earlier stages of this Bill I was permitted to move one or two Amendments dealing with Income Tax allowances. Since then I have been surprised at the correspondence these Amendments have brought me from all parts of the country, drawing attention to the extraordinarily anomalous results of the existing allowances. These allowances—and I am sure the Chancellor will agree with me—have been built up by accretion over a long period of years, and have never

been fully thought out and co-ordinated with one another. It mattered less when Income Tax was at 4s. 6d. or 5s. in the £, but it matters a great deal when it is 10s. in the £. I am quite certain it is not really the will of this House that an elderly single man should be £25 a year worse off than a widower of the same age living in exactly the same circumstances; but that is the present effect of the housekeeper's allowance which we are re-enacting in this Bill. I wonder whether the House realises it Is worth £25 to be born on 4th April and not on 6th April. For some reason, quite inscrutable to me, it is possible for parents to receive the whole of the child's allowance for 12 months even if their child is born only a day or two before the end of the financial year. I, perhaps, ought not in my own interest to bring this to the attention of the House, because I was fortunate enough to have a child born on 2nd April in one year; I was surprised at the financial benefit which the Chancellor of the Exchequer granted me.

Mr. G. Griffiths: You want to try it on again.

Mr. Brooke: I hope the Chancellor of the Exchequer himself will, between now and the next Budget, review the whole system of Income Tax allowances. My last example shows that I am not pleading for him to give up revenue and make concessions with his left hand and with his right. I am pleading that he shall reexamine the whole system and make sure that the concessions already given are rightly directed. In his next Budget he could thus do a great deal to soften the asperity, without altering the total burden, of the tax he imposes on us.

Sir K. Wood: I am very much indebted to my hon. Friends in all quarters of the House for the kind and generous observations they have made about this Bill and the Budget generally. I am sure the House will agree with me when I say what a great deal I owe to my right hon. and gallant Friend the Financial Secretary, and to my right hon. and learned Friend the Attorney-General. I should like also to say that it would have been quite impossible to have dealt with our financial affairs as drastically as we have, and to have put my Budget proposals into law as quickly as we have, without the help and full co-operation of this House. I am exceedingly obliged to the House


for the consideration and kindness which have been shown to me in the conduct of this Measure. I know that hon. Members will feel with me when I say how often it is a matter of regret that I have to refuse propositions put to me from all quarters of the House, but they will appreciate that it is part of my duty and business to maintain the general and main financial proposals I have made. A different note was struck by my hon. Friend the Member for Belfast University (Professor Savory). He made a speech with which I could not wholly agree, but which, I think, will do me no harm—perhaps some of what lies behind his speech will do me some good.
This Bill represents the fifth of our war Budgets. It affects the finances of the third and fourth years of the war, and on that account, if for no other, is of considerable importance. While I appreciate all that has been said in praise of the proposals, I do not disguise from my own mind and thought that a great deal still has to be accomplished. We have always to be exceedingly vigilant to maintain our present financial position. As I say, while I appreciate all that has been said, in my judgment there is still further scope for reducing civil expenditure on non-essentials, and still scope for more and more saving. So far as the main principles of this Bill are concerned, we have endeavoured and must continue to endeavour to concentrate the financial resources of this country on war production, and that will continue to be our major aim. I would also say—and I think the House will agree—that the stabilisation of prices should go on, for the policy has proved its usefulness and success. Its importance as a factor in preserving sound moral, social and economic foundations for our war effort can hardly be exaggerated. I hope also to maintain, as a result of the proposals approved in this Bill, the policy of borrowing as cheaply as possible.
I would ask hon. Members to continue to do all they can in connection with the voluntary Saving Movement. The present need is to increase the number of savings groups. I am glad to say that new street groups are being formed at the rate of 1,000 per week, and I hope that that figure will soon be doubled or trebled. I hope that my right hon. Friends will repeat and reinforce that this country

must regard unnecessary and unreasonable expenditure as definitely contrary to the whole spirit of the time and of the sacrifices which so many others are making. I hope it will also be appreciated that many things which are not luxuries, and are normally in common demand, are inevitably in short supply; and that whenever anyone refrains from buying things not absolutely necessary to him, he gives others to whom they may be of more use, a better chance of obtaining them at reasonable prices. Finally, I would say that whatever is saved should be lent to the State. It cannot be put to better use since that helps to finance the war on the soundest possible basis.
This Bill, following the Budget, undoubtedly and unavoidably adds one more layer to the heavy burdens imposed by its four predecessors, and the extent of that burden has been emphasised once again to-day. It is a measure of our will to leave nothing undone to achieve victory. Even if we exclude the Excess Profits Tax, the estimated full yield of all the new taxation imposed by the five war Budgets amounts to no less than £934,000,000, which is £38,000,000 greater than the whole of our tax revenue in 1938, so that, even apart from the Excess Profits Tax, the burden of taxation has more than doubled since before the war. Of that total of £934,000,000, £500,000,000 was accounted for by direct taxation and £434,000,000 by indirect; and a great measure of that indirect taxation has, of course, been on optional and not essential items of expenditure. Nowadays we do not pay much attention to the arithmetical difference between direct and indirect taxation in any particular year, but I think we may be satisfied that, taking our war Budgets as a whole, the burden of new taxation has been pretty fairly distributed between the various taxes.
The fairness of the incidence of Income Tax must always be carefully appreciated by me, and kept in mind by the House. Undoubtedly taxpayers with higher incomes are carrying an unprecedentedly higher burden, and I should like to pay my tribute once again to the good will with which they have shouldered it. But, since the primary object of war increases in the tax has been the reduction of consumption, it was of course inevitable that it should be extended to the lower


incomes, which are specially important in this respect because in the mass they represent such a large proportion of the purchasing power of the nation. This year's special White Paper on the National Income shows that incomes under £250 accounted for nearly 60 per cent. of the total personal incomes in 1940, while incomes from £250 to £500 accounted for nearly another 20 per cent. We have endeavoured in very many directions to ensure that the burden of taxation on these smaller incomes should be as fair as possible and its collection as easy as possible. These burdens bear very hardly on certain sections of the community. I have endeavoured to meet some of their necessities—and at considerable cost to the Exchequer and the taxpayer—for instance, in the policy of stabilisation.
I should like to say a word about the deduction of tax from the weekly wage-earner. I gave a full review of the working of the scheme on the Second Reading, and explained a number of proposals which I suggested should be made, and some of which are now incorporated in the Bill. These measures included the alteration of the basis of assessment for wage-earners in seasonal employment so that their tax deductions would be spread more evenly over the year. Another suggestion which has been adopted was the deferment by one month of the commencement of the tax deduction period, so that the Inland Revenue would have a better chance to make the assessments and notify the employer promptly of the tax to be deducted. Finally, there was the alteration of the limits below which the taxpayer's weekly wage must not be reduced by the tax deduction.
I think I can claim that all these proposals, some of them now embodied in the Bill, have met with general approval, and I considered what was said about whether it would be possible to give some slight modification of the limits which might give further relief. In place of the existing limits of £1 17s. 6d. for a single taxpayer and £2 17s. 6d. for a married couple, it was proposed to introduce new limits as from 1st August next, of £2 for a single taxpayer, £3 for a married couple without children, £4 for a married couple with one child, and £5 for a married couple with two or three children. But there are other cases, where the taxpayer

has dependants, and where the limit ought to be more than £2. For example, there is the case of the widower or widow with children. Obviously, if a higher limit than £2 is given to a man who has only himself and his wife to support, there is a case for something more than the £2 limit for a widower or widow with children. I have decided, therefore, to apply the £3 limit not only to the married taxpayer without children but also to any taxpayer who has a child for whom she or he can claim the child allowance. Similarly, the £4 limit will apply not only to the married couple with one child but to the taxpayer with two children, and the £5 limit will apply not only to the married couple with two or more but to the taxpayer with three or more children.
It is not possible to provide with the same degree of precision for other cases where the taxpayer has dependants and where in consequence the £2 limit would be too low. Provision will be made to see that in these other cases, if the taxpayer notifies the collector, the latter will instruct the employer to apply that limit which is appropriate having regard to the tax allowances which the taxpayer is entitled to in respect of dependant relatives. I would commend to the House the desirability and the justice of these modifications. I think that I can claim to have given proof of the way in which I have watched the scheme for deducting tax from wages, and have shown my readiness to make without delay any modifications which could be regarded as definite improvements from the taxpayer's point of view. I will continue to watch the working of the scheme with that object.
I am indebted to those who have emphasized the importance of the scheme for post-war credits, particularly for those who have the smaller incomes. Since I last spoke about this matter the actual form of the post-war credit certificate, which will be issued this year to every taxpayer concerned, has been made public. I think that those who have seen it will say that it gives the real and tangible evidence which is so necessary, of the right to post-war credit, and which will assist each taxpayer to a fuller realisation of its value.
My hon. Friend the Member for Edgbaston (Sir P. Bennett), who has taken such an interest in this matter and


made such useful contributions to our Debates, referred to the recent activities of the Inland Revenue Staff Federation. This is a Civil Service association representing the clerks employed in the offices of the inspectors and collectors of taxes. This Association, like other Civil Service associations, has the fullest opportunity to raise all matters relating to staff affairs on the Whitley Council and with the Department itself. It can also at any time, in relation to any matter arising out of the work of the Department place its experience and knowledge before the Board of Inland Revenue, under whom its members serve.
There is a general Service rule that a civil servant must retain a proper reticence in discussing public affairs; more particularly those with which his own Department is concerned. The rule is directed to ensuring the impartiality of the Civil Service in administering the law and carrying out the wishes of Parliament. That impartiality would be prejudiced if the civil servant publicly identified himself with one side or another of a particular issue. This rule is of the greatest importance in the case of the Inland Revenue Department, which is bound by special conditions of secrecy, which preclude any communication of any details whatever of taxation affairs. I think that this incursion of the Federation into the public eye has been unfortunate. It is to be regretted that any body of civil servants should allow themselves to be led by any idea of serving the public interest, to adopt such a course, and to break the long-established Civil Service tradition in such matters. As I have already observed, civil servants and Civil Service associations have proper channels available for tendering advice, and it is by using these channels that their knowledge and experience can properly be brought to bear in connection with any matter affecting their Departments. I hope that this course will be followed in future.
I now turn to what has been said about the Excess Profits Tax, I would be the last to claim that it is in every respect a perfect tax. It is in the nature of things that a tax of this kind, which, broadly speaking, takes as its measure of charge the excess of current profits over profits of some past period, produces anomalous results in particular

cases. From the purely fiscal point of view the taking away of the whole of the excess profits by the 100 per cent. charge has the great disadvantage that there is no cushion against the rough edges which there may be and, indeed, must be in a tax of this character. My right hon. Friend suggested the appointment of a committee, and he was reinforced in this by my hon. Friend the Member for West Lewisham (Mr. Brooke). I think that my hon. Friend got into dangerous waters when he came to discuss what that committee would have to do. He rather indicated that the committee was to be set up to consider hard cases not only in connection with E.P.T., but with taxpayers generally, and, as I understood him, to remedy any hardship or injustice that would be found. That would present great difficulties. It is a proposal to which no Chancellor could agree.

Mr. Brooke: I may have failed to make myself clear. In recommending a committee, I was speaking solely of the Excess Profits Tax. When I spoke of matters such as the Income Tax allowances my appeal was addressed directly to my right hon. Friend, and I was asking that he, in conjunction with his learned officials, should study that matter as affecting individuals between now and the next Budget.

Sir K. Wood: I can give the assurance that it has always been the object of myself and my advisers to do all that we can to mitigate hardships. My own general impression is that on the whole our Inland Revenue officials treat with great consideration cases that are specially brought before them for mitigation. As to the proposal of a committee in connection with Excess Profits Tax, I have made a suggestion to my hon. Friends which I think would be much more convenient, because I think that the setting up of a committee would raise undue hopes. The House must appreciate that I must maintain the revenue, and that there is a major principle of policy, which we have deliberately adopted, in the 100 per cent. E.P.T. The House will notice that throughout these proceedings I have resolutely maintained that policy and I cannot hold out any hopes that it can be the subject of modification. When we come to the question of a committee we meet great difficulties, as to how far a


committee is bound by questions of policy, and how far it will go into questions of administration. I am always willing to confer with my hon. Friends on this matter, and I have also suggested that they themselves, or one of the big associations, should appoint some expert people to confer with the Board of Inland Revenue to see whether, within the scope of existing policy, there are any practical steps that could be taken to meet any of the points which people up and down the country desire to put before us.

Sir G. Schuster: I do not know whether the right hon. Gentleman was referring to the proposal I made. My proposal was not aimed at getting relief in any way but at getting a true knowledge of what was happening to the structure of industry as a result of the present system of taxation.

Sir K. Wood: Many of my hon. Friends have approached me on this subject. It might be useful, of course, to know how the scheme is operating, but most of the big associations in conferring with me have shown that they have a pretty good idea of the working of the tax. What I was directing my mind to was whether there was any way of clearing up difficulties which have arisen within the scope of the tax. I would only add now—because, as I say, we can talk together about it if necessary—that the Board of Inland Revenue are always willing to receive suggestions, and I am sure that they would, at my request, confer with any of my hon. Friends or their representatives on this matter.
I have only to say this in conclusion: I should like to emphasise, before we part with this Bill, which, of course, is so far-reaching and affects so many people, that I fully realise that all our war increases of taxation, both direct and indirect, have been imposed for a double purpose. First, I hope they have materially assisted the financing of the war on a sound basis, avoiding recourse to what might have been easier, but would certainly have been more dangerous alternative methods. Secondly, and even more important, the increases have been made to secure the surest possible means open to the Exchequer of reducing civilian consumption. Rationing and other controls are vital

parts of this financial and economic policy, and they have, of course, their special objects, such as ensuring a fair distribution of the limited available supplies of the necessaries of life, but obviously no measure can be so effective in reducing civilian consumption as a reduction of the incomes which can be spent.
I think few people will be found to-day who will question the vital part which our heavy and widely-distributed taxation is playing in furthering the war effort. But I think we can also find a good deal of satisfaction in the fact that the taxation policy which is embodied in this Bill is also, fortunately, the policy which will definitely help us to face our post-war problems. I do not think it is pessimistic to suggest that the reconstruction of the country after the war will present many similar problems to those we are now facing, and to the extent that we now finance the war by taxation instead of by loans, the repayment of which will have to be provided for after the war, our hands will then be so much the freer to make progress in directions which so many desire, and also, of course, to concentrate on new problems which the peace will undoubtedly bring. "Pay as much as you can as you go" is, therefore, not a barren or doctrinaire policy. It is a wise and eminently practical policy, which will undoubtedly show good returns after the war.
I will, of course, bear in mind the criticisms which have been made throughout the Debate, and I will keep a close watch on any developments which may be suggested as a result of those criticisms, but I think I am rightly interpreting all the Debates which have taken place on this Bill when I say that the House and the country have welcomed the Budget and the Finance Bill, as measures which not only meet fairly and squarely the conditions in which we find ourselves at this stage of the war, but also help, and that is why they have been supported, to maintain a sound foundation for the finance of future years, whether they be years of war or, as we hope, years of peace and of reconstruction.

Question "That the Bill be now read the Third time," put and agreed to.

Bill read the Third time, and passed.

Orders of the Day — ROYAL NAVAL VOLUNTEER RESERVE BILL. [Lords.]

Considered in Committee, and reported, without Amendment.

Motion made, and Question proposed, "That the Bill be now read the Third time."

Mr. Ammon: I do not propose to impede the passage of this Bill, but there are two questions I wish to ask the Minister in charge. He will recall that on Second Reading I expressed the hope that he would persuade those concerned in his Department to give some attention to the codifying of the various Acts of Parliament which deal with Admiralty matters. I pointed out that even in this limited Measure there are references to three main Measures. So far as I can see, this is the second Bill amending the Act of 1859 which has been presented in recent years. The last one had a reference to certain payments coming to these volunteer reservists which were then commuted for a £5 grant. I wanted to know whether that matter was in any way affected by this Bill. The other point was whether it in any way affected the service of these volunteer reservists counting towards the long service and good conduct medal.

The Financial Secretary to the Admiralty (Mr. George Hall): My hon. Friend did raise the question of bringing these Acts up to date and codifying them; I can assure him that this matter is engaging the attention of the Admiralty. He will realise, of course, that it would be difficult to do this during the period of the war. I assure him that the matter will be further considered when the war is over. My hon. Friend referred also to the Act of 1927. The Amendment which brought about the legislation of 1927 was for a different purpose. Under that Act, the detention pay was discontinued, and a grant up to £5 was made to the reservists when they were called up to rejoin the Service. That is the position at the present time. On mobilisation, the £5 is paid to the Royal Naval Reserve and to the Royal Naval Volunteer Reserve. Those who are mobilised would prefer it this way rather than have it spread over at the rate of 2d. a day.
My hon. Friend raised the question also of the continuous service men detained under Royal Proclamation after their

engagement has expired and who have been re-engaged for pension, and he asks whether they are allowed to count that time towards the award of good conduct or long-service medals. Some are and some are not. In the main it may be said that they are. There is some difficulty in agreeing that it should apply to the reservists who are mobilised, because this matter is linked up with the question of the time which counts for pension, but I think I can tell my hon. Friend that we shall consider the point which he has put. If it can be met, we shall meet it.

Question, "The Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed, without Amendment.

Orders of the Day — COAL (CONCURRENT LEASES) BILL [Lords].

Order for Second Reading read.

The Solicitor-General (Major Sir David Maxwell Fyfe): I beg to move, "That the Bill be now read a Second time."
This short Bill deals with a set of circumstances which were overlooked in the coal legislation of 1937–38, vesting the royalties in the Coal Commission. Hon. Members will remember that the original Act drew a distinction between lessees who were working coal and lessees who were drawing royalties. It was important to leave the first undisturbed and to catch the second and vest the royalties in the Commission. Therefore, the procedure of the Act, as most lessees were working coal, was to exempt leases, subject to an exception. This was where you had a lease with an under-lease derived out of it, in regard to which the under-lessee was paying royalties to the original lessee. That form of enactment worked perfectly well in the ordinary case of a lease from A to B and another lease from B to C, who was working coal derived under the first lease. Unfortunately, a different series of facts came before the court, where you had an original lease from A, a further lease to C, who was working the pit, and, 11 days before the Act came into force, another lease from A to D which was subject to the original lease from A to C but extended to a longer period and transferred all A's rights to B.
In that case, the original lease to the person who was working the pit was not derived out of the lease to B, the other person. As a result, the royalties which were paid by the person working the pit were not caught by the Act and did not vest in the Commission. Hon. Members will agree that, the House having agreed to the principle that the royalties should be vested in the Commission, the case which I have put to the House should be covered. We have covered it in the Bill by suggesting that the lease should be dated as if it were derived from the first lease within the terms of the original Act. My legal Friends will understand that the Bill is to deal with a casus omissus. I hope that the Bill, although belatedly, will put the matter right.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time, and committed to a Committee of the Whole House.—[Mr. J. P. L. Thomas.]

Bill immediately considered in Committee; reported, without Amendment;, read the Third time, and passed, without Amendment.

MARRIAGE (SCOTLAND) BILL [Lords.]

Considered in Committee, reported without Amendment; read the Third time, and passed, without Amendment.

Orders of the Day — MEMBERS' PASSES (INSPECTION).

The Lord Privy Seal (Sir Stafford Cripps): I beg to move,
That police officers on duty in the Palace of Westminster are hereby empowered, when so instructed by the Serjeant at Arms attending this House, to require Members to produce the passes issued to them.
The object of this Motion is to regularise a practice which has been in operation for a long period of time. The House will recollect that in May, 1940, for security reasons, it was considered advisable to put certain restrictions on admission to the Palace of Westminster, and that Regulations were issued under your authority, Mr. Speaker, and under that of the Lord Great Chamberlain, dated 28th May, 1940. The fifth of those Regulations laid down that the inspection

of all passes would be carried out regularly by the police and custodians, and all holders of passes were requested to co-operate with the authorities. Permanent passes were issued to Members of the House under those Regulations and to certain other persons who were regularly employed about the House, and under that paragraph 5 the police were given instructions by the proper authorities to inspect the passes at intervals. You yourself, Mr. Speaker, described these arrangements briefly to the House on 29th May. You then expressed the hope that all Members would be prepared to cooperate in the strict carrying-out of these necessary precautions. There have, since that time, been certain changes in the arrangements which were found necessary by experience of their operation, and notice has been circulated to all Members—it was circulated, I think, on 11th February last—drawing their attention to the present form of those Regulations. The passes have in fact been inspected at certain intervals by the police, acting upon the orders of the responsible authorities.
Certain Members of the House felt, I think, that the action of the police in inspecting the passes might constitute some interference with the Member's constitutional right of access to the place where Parliament is sitting. This, of course, was not the intention of the Regulations. Their intention was to give a facility to Members in circumstances when otherwise it might have been difficult for them to gain access, and also to enable the security of the proceedings of the House to be maintained. You, Mr. Speaker, have been consulted upon this matter, and in order to remove any doubts as regards the constitutional position we are to-day asking the House to pass the Motion which I have read and so to give its formal approval to the procedure as to passes which in fact has been in operation since May, 1940. We hope that the House will agree to this proposal, and that Members will in, the future, as they have done in the past, co-operate in the carrying-out of those security arrangements which, both in the opinion of the Government and of the authorities of the House, are still necessary for their safety. I therefore ask the House to approve this measure.

Earl Winterton: I must confess that, if I may use the only Latin quotation with which I am familiar, I am, to some extent, the fons et origo mali in this matter, and I would like to thank the right hon. Gentleman the Leader of the House, and the Government, for acceding to the request which was made to them privately, not only by me but by other Members, and by a Noble Lord who was formerly an hon. Member of this House and who now sits in another place. The matter is perhaps a slightly delicate one to discuss, because you, Mr. Speaker, as the Leader of the House has reminded us, did mention that this practice was to come into operation, and you said that you assumed that the consent of the House would be given. Really and properly, as I frankly confess, any objections taken to the system should have been entered at that time. I personally was not aware of the form which the pass would take, and that is, to my mind, a rather important factor in the case.
The right hon. and learned Gentleman the Leader of the House used the phrase which I think exactly expresses the constitutional situation, that from time immemorial every right hon. and hon. Member of this House has had the constitutional right of access to the House. It is inherent in our position, in fact it is for that reason, as the House will be aware, that we pass every Session a Sessional Order calling upon the police to see that the approaches to the House are kept open. It is interesting, if it is not going outside the Motion, to recall to the House that that measure arose, I think, because of the circumstances surrounding the Lord George Gordon riots. On that occasion hon. Members were molested when they attempted to enter the House, and some of them were actually assaulted—including, I believe, the Lord Chancellor—within the precincts of the House. Subsequently it was held that it was the duty of the proper authorities, either the guards who existed before the police and afterwards the Metropolitan Police, to see that Members had free access to the House.
Some might say that that is all very well from the constitutional point of view, but is it not rather pernickety in time of war to embark upon these matters? I venture to say that it is not. It is very

necessary that the House itself, and no other body, should keep authority over this matter. Circumstances might arise—I do not say that they would arise, and I agree that it would be a most unreasonable Government which would do it—in which there might be a Government after the war which would determine to continue this practice. There might be circumstances in which a number of hon. Members were coming down hurriedly to vote without having heard the Debate—as hon. Members do—and the Government might hint that this would be a good opportunity to examine their passes and, if they had not got those passes, to refuse them access to the House. Whether that is so or not, it is very important that those old constitutional principles should be adhered to, and I think that the plan the Government have adopted of putting down a Motion with which those of us who had originally taken exception to the proceedings entirely agree, is the correct method of procedure.
There is one other delicate matter which comes into it. I do not want to comment adversely upon it, but one of the reasons why I object to the issue of this pass and the conditions surrounding it without a Resolution by the House, is that, as Members who have it in their possession will observe, it is signed "Ancaster, Great Chamberlain." It would be very improper to say anything derogatory of the Noble Lord who occupies that position, but it is a hereditary office; that is not a Government, or even a Crown, appointment, and I most respectfully urge that whether or not a Member enters this House should not in any way depend upon the whim of the Lord Great Chamberlain. It is purely a matter for Parliament itself. The Lord Great Chamberlain has certain duties, which I do not want to discuss now, and it is no doubt merely a convenience that he should sign this card. I and my hon. Friends are extremely grateful to the Government for having put down this Motion. I do not think it is a waste of time, even in war-time, to assert our ancient constitutional rights.

Major Milner: I agree with almost everything which the Noble Lord has said. I recognise, of course, the propriety of the action of the Government, and I approve of their coming to the House in order to regularise


the position, if it needs regularising, and put the matter beyond doubt. The Lord Privy Seal has refreshed our memories with regard to events of May and June in 1940 in this matter. Like the Noble Lord, I had forgotten the precise form in which this matter was first put before us. I am not quite clear now how far these Regulations have the force of law. That they received the assent of the House when Mr. Speaker put them before the House I have little doubt. In any event a good deal of water has run under the bridge since that time. So far as I know, on only one occasion have I been challenged or asked for a pass. There may have been other occasions of which hon. Members are aware. On that occasion I ventured to ask for the authority for the demand, and to decline formally, and I hope pleasantly, to the officer, who was only carrying out his duty in requesting me to produce my pass on that occasion. In doing so, I made no reflection, nor do I do so now, on the officers of this House, particularly the Serjeant at Arms, who so competently and courteously carries out the desires of the House. But I do feel it desirable that the matter should be put beyond doubt and that, if Regulations are required, they should be Regulations in proper form.
It is a very old-established traditional right to have free and unhindered access to this House at all times. One does feel that even in war-time some of us should pay some attention to these matters, because little by little a good many of our rights—I prefer to call them rights rather than privileges; most books term them privileges, which they may have been originally, but they are now rights of long-established usage—are little by little being impinged upon, sometimes almost imperceptibly. For example, at about the same time the entrance by the subway from the underground station into Palace Yard was stopped up and has continued to be stopped up since that time. It may be in accordance with the desires of the military authorities, and it may be right and proper for that very convenient entrance to be stopped up. Nevertheless, it is a matter for consideration whether that was in order, and I should be glad if my right hon. and learned Friend would look into that point, because it is a great inconvenience, if

it is not necessary to have to walk round and across the road and so on when one has been accustomed to taking a short cut through the precincts of the House, where in the early days of the war police officers were on duty and where, as far as I know, no difficulties ever arose. It is desirable that one should, at any rate, take note of these infringements and in those cases where they are brought before the House have the opportunity to approve of them, particularly in such circumstances as we are living in to-day.
The Lord Privy Seal, if he will forgive my saying so, did not indicate any grounds for the Motion. Is it suggested in any way that any difficulty has arisen, or that any unauthorised person has endeavoured to obtain access to the House either with or without a pass? Because unless that is the case it is desirable we should limit all these regulatory matters to as small an area as possible. There is no point in putting even a Regulation of this sort into force if it is not necessary. I gathered from the Lord Privy Seal that no difficulty has arisen.

Sir S. Cripps: I did indicate the reason, which was that certain Members had raised the question as to whether this matter ought to be regularised or not by having this Motion. The actual Regulations have been in operation consistently since 1940 and have operated very well and are considered necessary.

Major Milner: I am obliged to my right hon. and learned Friend, but the fact that they have been in existence a couple of years does not indicate—

Sir S. Cripps: And are considered necessary.

Major Milner: Considered necessary by whom?

Sir S. Cripps: I said both by the Government and the authorities of the House.

Major Milner: I do not want to create any difficulty in a matter which is capable of quite easy solution. If this is the right and proper course, the right hon. and learned Gentleman should, I think, indicate the grounds. We cannot be expected to accept without some explanation even the mere Regulation which has been in existence for two years, and I hope he will be good enough to tell us the grounds


on which this Motion is brought before the House. Assuming that these grounds are considered good by the House, the question arises as to whether the terms of the Motion moved by my right hon. and learned Friend do what is required, or whether the terms of that Motion do not go sufficiently far, or go too far. What happens if a Member does not produce his pass? Is there any authority to the police officer to deny him access to the House? Nothing is said in the Motion with regard to that. It does not seem to me a very useful practice to demand passes unless those demanding them have authority to refuse access if those passes are not produced. Therefore, I shall be glad to know what is the precise position of a Member who has not his pass with him or who does not produce it, as the case may be.
Then, again, the authority which it is proposed shall be given is to be given to the police. But there are military about the building, and I presume that in certain circumstances the military would be in control, and probably the police would be under the control of the military. If the military are in control of the precincts of the House, are they to be entitled to see the pass of a Member of Parliament? Clearly not, under the Motion which the right hon. and learned Gentleman has brought before the House. It is a matter for consideration therefore whether the proposal which has been made should or should not be extended to the military authorities in special circumstances which may arise.
The right hon. and learned Gentleman did not give us any assurance, though I have no doubt it is the intention of the Government, that these proposals should only continue for the duration of the war. I think that that is the case, but, if so, why not put in the Motion:
That, for the duration of the war, police officers on duty in the Palace of Westminster are hereby empowered …"?
The right hon. and learned Gentleman knows better than anyone else in the House that a mere assurance given by the highest authority in this House has not the force of law. He might consider the Amendment I have suggested. Having regard to the fact that no grounds have been given to us, no real difficulty having arisen so far as I know, I myself frankly doubt the necessity for these steps being taken. So many sins seem

to be committed in these days in the sacred name of security, but if the Government and the House are of the opinion that these proposals are necessary, I should not think it right in present circumstances to oppose them. There is the duty on all of us at all times, not least in war-time, to insist on these matters coming before the House, with the full and free right of discussion and decision, and that the rights which have been handed to us for generations should be preserved in full force and effect. My right hon. and learned Friend will, I hope, answer one or two of the queries I have put, and under those circumstances I should therefore not propose to make any further objection.

Sir Patrick Hannon: Would the right hon. and learned Gentleman say whether the passes already in the possession of Members of this House which we took out in 1940 be available now, or shall we have to take out new passes to obtain access to the House?

Captain Sir William Brass: It seems to me that the Noble Lord and the hon. Member who has just spoken seem to feel that these passes are a sort of hindrance to Members of Parliament.

Earl Winterton: The hon. Member must not attribute to me the remarks made by another hon. Member. I never said the passes were a hindrance. I said I was concerned with the constitutional point, and that I supported the Motion.

Sir W. Brass: No, I used the word "hindrance"; the Noble Lord, I think, said that a Division might be taking place and somebody might be held up. I should have thought that that would have been a hindrance, but perhaps he does not think so. The point of these passes is not to hinder people coming to the House of Commons, but to help them. We might have a blitz here, there might be bombs falling, and we might have a certain number of policemen here who did not know us. Obviously, it would be necessary for some kind of pass to be given to Members. I quite agree with the Government in putting down this Motion. As far as I can make out, these passes are to identify us. It is obvious that no Member of Parliament is to be prevented from coming into the Palace of Westminster just because he has not got a pass. The pass is


issued in order that people who come here and who, possibly, are not recognised by the policeman on duty at the time, may be admitted. That, I am quite sure, is the only reason. I hope that when my right hon. and learned Friend replies he will make the point that these passes are to help us, and that orders will not be issued by the Serjeant at Arms that all Members are to be held up at a certain time on certain days in order to have their passes examined. It is intended, I think, simply that the police, if they do not happen to know a Member by sight, will ask for his pass, and then allow him to come in.

Mr. Edmund Harvey: It is obvious that the hon. and gallant Member for Clitheroe (Sir W. Brass) has not happened to attend the House when passes are being examined. Every Member is then asked to produce his pass. I do not know what happens to the unfortunate Member who has not got it with him. I have been in the position of having had my pocket picked, and all my papers taken away. If that had happened on a day when the passes were being examined, what would the position have been? Should I have been unable to attend the Sitting of the House? Such a thing might happen at any time to any one of us. The Lord Privy Seal ought to make quite clear what is the position of a Member who, perhaps through no fault of his own, is unable to produce the pass when requested to do so. We are very much indebted to the noble Lord the Member for Horsham (Earl Winterton) for having raised the very important constitutional issue involved in this practice. I hope the Government will make it perfectly clear that this is an exceptional war-time measure, taken under the stress of very special circumstances, and that it will not be continued, or taken as a precedent, when the emergency has passed. It is only under conditions of that kind that some of us would be willing to agree to the passing of this Motion.
The hon. and gallant Member for South-East Leeds (Major Milner), very pertinently, asked for rather more reasons why this should be necessary. I have been trying to think of a reason. The only one I can think of is that almost every one of us, except you, Mr. Speaker, has a double

somewhere outside this House, who might be able to come in and pass for a moment or two as a Member. There is a possibility that in war-time use might be made of that, contrary to the national interest. That is the only reason I can see why such a measure should be necessary because as a rule the police are so familiar with Members. They know perfectly well who are Members and who are not. There is one other difficulty which has to be provided for and that is the case of the new Member. A Member desiring to take his seat appears at the House on one of the days that it is necessary to have a pass. He has not got a pass. He has not yet taken his seat. Will there be a way by which he will be able to take his seat on that day? That surely is an unnecessary obstacle to put in the way of a new Member and of his electors.
I notice that the wording of the Motion is very wide. I hope that the Lord Privy Seal will consent to vary it and give expression to what I think is the intention of the Government. The Motion is:
That police officers on duty in the Palace of Westminster are hereby empowered …
We do not want to have police officers coming to us in the Library or at any point inside the Palace of Westminster asking for our passes. What is intended is that police officers should be on duty at the entrance to the Palace of Westminster, and it should suffice if this exceptional power were exercised at the entrance to the Palace and that Members should not be kept in anxiety at all times lest a police officer might come to them at any moment in any part of the Palace and ask for the production of their passes. We should no longer feel ourselves at home in our own House. I hope that the Lord Privy Seal will be willing to consider making explicit in the Motion what I believe to be the intention of the Government.

Mr. Leslie: May I ask whether some arrangement will be made to provide shelter at the entrance? On the last occasion it was pouring rain and some of those who were carrying cases and satchels had to put them down while they produced their pass. It was very disagreeable both to Members and the police at that time. There ought to be some sort of shelter through which Members could pass.

Mr. Silverman: In spite of the serious features of this Motion one detects a certain atmosphere of levity as though what we are doing perhaps were some kind of joke. I am certain the Government do not intend it as any kind of joke and that if they had not thought it vitally necessary they would not have introduced it. Therefore, they must not complain if we Members of the House of Commons treat their proposal seriously, and treating it seriously means treating it seriously from the point of view of opposing it as well as from the point of view of recommending it. It cannot be denied that it is a serious innovation. At the beginning of every Session we assert certain privileges, one of which is to be allowed unhindered access to this House. It has never been thought necessary before that we should produce to a police officer some kind of credential to enable us to attend here and carry out the duties to which we are called. It may be that there are good and sufficient reasons why this innovation should now be made and I am certain that no Member of the House would oppose this suggestion if good and sufficient reason were adduced for it. It is fair to point out that so far no one on behalf of the Government has adduced any reason at all. Various Members have suggested various causes, but the House is entitled to ask the Lord Privy Seal for the reasons which have induced the Government to consider that this serious innovation in Parliamentary procedure is necessary. The House itself should be the judge of the validity of those reasons and I do not think the House ought to pass this Motion until the reasons have been communicated to it and until it has appeared to the House itself that the reasons are good and sufficient. I hope the Lord Privy Seal will tell us in a moment or two what are the reasons.
The next point I would make is with regard to the urgency. I should have thought that the usual channels might have been used and Members given a little time to consider the position instead of being called upon to come to a decision at a moment's notice, in a very thin House, at the end of a Sitting, when no one could say that the result of a Division, if there were a Division, was really representative of the feeling in the House. Surely it would be better if the Lord Privy Seal would tell us the reasons and

take back the Motion until Members have had the opportunity of considering it, if only for 24 hours, before insisting on getting the sanction of the House in this way. There cannot be any urgency about it. We went through the whole of the aerial attack on London without it, so that, however necessary it may be, it cannot be really necessary to do it in this slipshod, hasty way. Let us have the reasons and an opportunity of considering them and when we do take a decision, let it be a deliberate decision and not a decision rushed through in a light-hearted way in a matter which has its importance in the constitutional history of this country.

Dr. Morgan: Speeches have been made about the constitutional position and, quite rightly, adequate reasons have been required for this proposal. I should like to suggest that when this pass system—which is intensely disliked by some of us—is being carried out, it should be carried out in a way more in accord with the usual traditions and courtesies of the officers of this House. I, personally, had a very unpleasant experience of this pass system. It was a very stormy and rainy day, I was wearing a heavy overcoat, carrying an umbrella in one hand and a bag in the other. I was suddenly accosted in the open by a constable who asked me for my pass. My umbrella had to be closed, my bag put down and my overcoat opened and I had to search through my papers before getting it. It took five minutes to get the pass. There was no urgency, no blitz, no special reason why a rainy day should have been chosen. I see the Lord Privy Seal laughing but it is not a laughing matter. As a medical man I know that a, trivial incident might lead to serious consequences. I suggest that it is very unpleasant to be kept out in the open in circumstances of that kind. It was unpleasant for the constable, too, and I am not blaming him. He was merely doing his duty. The whole pass system should be revised. If it is to be carried out it should be carried out reasonably and shelter should be afforded.

Mr. J. J. Davidson: I do not want to speak after my right hon. and learned Friend. I do not want to give him all the advantages of defending counsel, but I would like to ask him one or two questions. Anxiety has been expressed by various Members with


regard to procedure. As was pointed out by my hon. Friend the Member for the Combined English Universities (Mr. Harvey), a Member may have his pocket picked or he may mislay his pass. If he can give definite satisfaction to the policeman on duty, will he be admitted even without a pass, or will the policeman be empowered to turn him away although fully satisfied from his own personal knowledge of the identity of the Member? Will a Member be refused admission on the technical ground that he cannot produce his pass? The statement has been made that many hon. Members have doubles in the country. I do not think I would make that charge against the great public. I think it is practically impossible, considering the various antics of several hon. Members—the Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor), for instance—to assert that they have doubles among the general public.
I want to ask what rights have Members of Parliament in this matter. How are we to know that the policeman who stops us at the gate is a bona fide policeman? If I am stopped at the gate by a policeman whom I know as a result of attending at the House for many years, will my right hon. and learned Friend tell me how I am to know whether the policeman may be a double? Am I authorised to ask the policeman for his authority to inspect the passes of Members? Am I entitled to ask for his pass as a policeman, or for a written authority from the Serjeant at Arms to inspect the passes of Members of Parliament? I want also to ask what passes are the policemen to inspect. I hold three passes. I hold a pass as a Parliamentary Private Secretary at the Home Office—a Home Office pass; I hold a military identity card with a photograph attached, such as all hon. Members received—a military identity card for Members of Parliament. I hold also the blue card that was officially issued by the House. If a Member has forgotten one pass, can he produce another pass? I do not know whether my right hon. and learned Friend, as Leader of the House, has a special pass as a Member of the War Cabinet; I do not know whether he has a special pass for entering into Departments—many Members and many Under-Secretaries have, and Ministers certainly have, I would like to know whether, if a Mem-

ber fails to produce one pass, the policeman will be entitled to admit the Member on his showing another type of pass. These are some of the points which make this Motion appear rather grotesque to me. The difficulties of new Members have been outlined. I would like to have a straight reply to the following question. Is the difficulty that certain hon. Members—a very small minority of them—who have always been in such a station of life and of such a character that they object to any small bit of trouble, have refused to show their passes with the same tolerance as the majority of hon. Members show them? Is this the real reason for the Motion? If so, I ask my right hon. and learned Friend to state it clearly to the House.

Dr. Haden Guest: I should like to know why this Motion has been placed on the Order Paper without hon. Members having had any preliminary notice through the usual channels. There was no mention in our Whip of this matter, which does involve very important issues. It appears to be in some way an encroachment on the liberty and freedom of hon. Members. When one is constantly given the impression that Private Members' opinions on various matters are not desired by the Government, one cannot help feeling that the Government wish in some way to use this Motion as a step, and then to go on to some further method of control. One cannot help feeling that one ought to protest against this Motion being brought forward in this way and without any explanation of it being given through the usual channels. If it is a matter of routine, it surely ought to have been mentioned as a matter of routine. You, Mr. Speaker, as protector of the liberties of the House, would not have allowed this Motion to be on the Order Paper if it were definitely out of Order, but one does feel that one wishes to be reassured as to what are the motives behind it.
Obviously, there is no objection in times of grave crisis and at a time when there is a threat of immediate invasion to people being asked to produce sufficient proof of their identity. But is that all that is involved in this? One cannot help feeling—and recent actions of the Government have given one this feeling—a little bit insecure as to the position of Members of Parliament and as to the


position of liberty of speech, even in this House—what one can say and cannot say. What is behind it? I feel that, far from being a little matter, this is a serious matter, and I think that the House ought to be given longer time to consider it. This Motion should not be passed at a small meeting of the House. If I were to call Mr. Speaker's attention in a certain way to the numbers of Members in the House, he would come to the conclusion that there were insufficient to carry on the Business. Under these circumstances it is insufferable that we should be asked to Debate and consider what may be a very important matter—we certainly have not had sufficient information about it—without any previous notice through the usual channels. I protest, and I suggest that this Motion should be taken back, and that after further consideration the Leader of the House should bring it up again in this form or in an amended form when Members have had an opportunity of being fully informed as to what are the reasons, instead of adopting this rather unseemly method of bringing forward an important matter.

Mr. Barr: I have been wondering what are the reasons for the change, and I have come to the conclusion that the reason is possibly that the policemen are always changing. The day still obtains when Mr. Speaker reads out at the opening of a Session that all Members of this House shall have free entrance. I have the feeling that we are

not known as we used to be. I make a habit of trying, as it were, to win a prize for being the very first at the House. I was well known to the policeman in the Inner Lobby, who used to say every morning, "First again, your reverence." If we have a Division, and fortunately we do not have many in these times, I would be in some difficulty. I do not complain, but when I come down to the House I find that we do not get the same service as we used to. When we were seen approaching the House, a line was often made, and we got over the street, but now one has to find one's way in the general push of those who are seeking at the risk of their lives to get over. I am wondering whether that is one of the reasons why this Motion is put on the Order Paper. Perhaps it is because Members have become quite unknown, and, if we have not lost our identity, we have lost our distinction.

Motion made, and Question, "That the Debate be now adjourned," put, and agreed to.—[Mr. James Stuart.]

Debate to be resumed upon the next Sitting Day.

The remaining Orders were read, and postponed.

Orders of the Day — ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Mr. J. P. L. Thomas.]